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How Should a Bureaucrat Proceed if He Doubts a Contractor's Self-Declared Race?

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For federal transportation contracting and for Small Business Administration progams, it’s advantageous to have one’s business certified as a Disadvantaged Business Enterprise, or DBE. The simplest way of gaining DBE status is for the business to be at least 51% owned by a member of one of the “official” minority groups–Asian American, Black, Hispanic, Native American, or Native Hawaiian/Pacific Islander–as such businesses are considered to be presumptively disadvantaged so long as they don’t exceed certain income thresholds.

But what happens if the government official suspects that the owner who claims minority status is not actually a member of the group he claims membership in? Almost everything I’ve read on the topic in the academic literature would suggest that the government does not arbitrate disputes over racial identity, and thus must certify based on self-identification.

This, however, is not true.

49 C.F.R. Section 26.63—What rules govern group membership determinations?(a)(1) If, after reviewing the signed notarized statement of membership in a presumptively disadvantaged group (see §26.61(c)), you have a well founded reason to question the individual’s claim of membership in that group, you must require the individual to present additional evidence that he or she is a member of the group.(2) You must provide the individual a written explanation of your reasons for questioning his or her group membership and a written request for additional evidence as outlined in paragraph (b) of this section.(3) In implementing this section, you must take special care to ensure that you do not impose a disproportionate burden on members of any particular designated group. Imposing a disproportionate burden on members of a particular group could violate §26.7(b) and/or Title VI of the Civil Rights Act of 1964 and 49 CFR part 21.(b) In making such a determination, you must consider whether the person has held himself out to be a member of the group over a long period of time prior to application for certification and whether the person is regarded as a member of the group by the relevant community. You may require the applicant to produce appropriate documentation of group membership.

The SBA provides the following additional guidance: “individuals who claim disadvantaged status as [for example] Hispanic Americans may establish their membership in that designated group by providing a birth certificate showing race, membership cards to exclusive Hispanic groups, or other evidence.” Office of Business Development US Small Business Administration, Standard Operating Procedure for the Office of Business Development SOP 80 05 5 (2016), 81. If there is additional DOT guidance, I haven’t been able to locate it.

What’s left uncertain, meanwhile, is whether (a) the decisionmaker must also consult the official federal definition of the group, under Statistical Directive No. 15, which is discussed in detail in this article and in my book Classified; and (b) what happens if the individual meets the federal definition but does not generally hold himself out to be a member of the group (but will acknowledge his minority ancestry if asked) and/or is not regarded by others to be a member.

The post How Should a Bureaucrat Proceed if He Doubts a Contractor’s Self-Declared Race? appeared first on Reason.com.


Source: https://reason.com/volokh/2023/03/18/how-should-a-bureaucrat-proceed-if-he-doubts-a-contractors-self-declared-race/


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