Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-96-05260/USCOURTS-caDC-96-05260-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 18, 1997 Decided June 10, 1997 

No. 96-5260

DYNALANTIC CORP.,

APPELLANT

v.

DEPARTMENT OF DEFENSE, ET AL.,

APPELLEES

Appeal from the United States District Court 

for the District of Columbia 

(95cv2301)

Daniel E. Johnson argued the cause for appellant, with 

whom Michael T. Janik was on the brief.

Daniel F. Van Horn, Assistant U.S. Attorney, argued the 

cause for appellees, with whom Eric H. Holder, Jr., U.S. 

Attorney, John D. Bates and R. Craig Lawrence, Assistant 

U.S. Attorneys, were on the brief.

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Before: EDWARDS, Chief Judge, SILBERMAN and WILLIAMS, 

Circuit Judges.

Opinion for the Court filed by Circuit Judge SILBERMAN.

Dissenting opinion filed by Chief Judge EDWARDS.

SILBERMAN, Circuit Judge: Dynalantic Corporation sued 

the Department of Defense and the Small Business Administration seeking to enjoin the procurement, under the government's so-called 8(a) contract set-aside program, of a flight 

simulator contract for which Dynalantic wished to bid. The 

district court held that Dynalantic did not have Article III 

standing. We reverse.

I.

The Small Business Act sets a "Government-wide goal" 

that "not less than 5 percent of the total value of all prime 

[federal] contract and subcontract awards for each fiscal 

year" be awarded to socially and economically disadvantaged 

small business concerns. 15 U.S.C. § 644(g)(1) (1994). The 

Small Business Administration (SBA), under § 8(a) of the 

Act, is authorized to contract with other government agencies 

to provide goods and services, and then to subcontract that 

work to qualifying businesses. The Department of Defense 

has its own 5% goal, which it may satisfy by participating in 

the 8(a) program. See 10 U.S.C.A. §§ 2323(a), 2323(e)(3) 

(Supp. 1997).

Qualifying businesses must be both "small," as defined by 

the statute, and 51% owned (and controlled) by individuals 

who are both "socially and economically disadvantaged." 

"Socially disadvantaged" individuals are defined as those persons who have been "subjected to racial or ethnic prejudice or 

cultural bias because of their identity as a member of a group 

without regard to their individual qualities." 15 U.S.C. 

§ 637(a)(5) (1994). SBA regulations presume that, "[i]n the 

absence of evidence to the contrary," members of certain 

racial or ethnic groupsincluding Black, Hispanic, Native, 

Asian Pacific, and Subcontinent Asian Americans---are socially disadvantaged. 13 C.F.R. § 124.105(b)(1) (1997). A 

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1 The SBA may award contracts either through competitive 

bidding or "sole source" procurement, in which the SBA selects a 

specific participant for a sole source award in order to aid the firm's 

business development plan, or where the procuring agency suggests 

the firm as a qualified company. See 13 C.F.R. § 124.308. Where a 

contract's price is anticipated to exceed $3 million ($5 million for 

certain manufacturing contracts), and there is a reasonable expectation that at least two 8(a) participants will submit fair market offers, 

the contract must be opened for competitive bidding among all 

eligible 8(a) participants. See id. § 124.311. Because the APT 

contract met these requirements, the Navy offered, and the SBA 

accepted, the APT procurement on a competitive basis, but only 

among eligible 8(a) companies. 

person not a member of a listed group may still qualify as 

socially disadvantaged by demonstrating, "on the basis of 

clear and convincing evidence," that he or she personally 

suffers from social disadvantage which stems from color, 

ethnic origin, gender, physical handicap, long-term residence 

in an environment isolated from mainstream American society, or other similar cause; is rooted in treatment experienced in American society; is chronic and substantial; and 

has negatively impacted the individual's entry into and/or 

advancement in the business world. Id. § 124.105(c)(1).

The Act in turn defines the "economically disadvantaged" 

as "those socially disadvantaged individuals whose ability to 

compete in the free enterprise system has been impaired due 

to diminished capital and credit opportunities as compared to 

others in the same business area who are not socially disadvantaged." 15 U.S.C. § 637(a)(6)(A). The SBA, in applying 

that standard, looks at an individual's personal income for at 

least the past two years, the total fair market value of all his 

assets, and his personal net worth. Under SBA regulations, 

individuals with a personal net worth exceeding $250,000 

cannot initially qualify as economically disadvantaged, and an 

individual is ineligible for continued participation in the 8(a) 

program (participation is limited to a maximum of nine years) 

if the individual's net worth exceeds $750,000. See 13 C.F.R. 

§§ 124.106(a)(2)(i), 124.111(a)(2).

In February 1995, the SBA requested that a contract for 

the development for the Navy of the UH-1N Aircrew Procedures Trainer (APT)a mobile flight simulator for the UH1N "Huey" helicopterbe awarded through the 8(a) program.1 Dynalantic, a small company that has designed and 

manufactured flight simulators for the military, filed an administrative protest with the contracting officer, contesting 

the decision to award the APT under the 8(a) program. The 

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protest and a subsequent administrative appeal were rejected, and thereafter Dynalantic filed a complaint in district 

court seeking declaratory and injunctive relief, claiming that 

the government's decision to procure the APT contract under 

the 8(a) program was unconstitutional under the Fifth 

Amendment and violated the Administrative Procedure Act.

The district court denied Dynalantic's motion for a preliminary injunction. The district court thought Dynalantic lacked 

standing to challenge the constitutionality of the 8(a) program 

and that Dynalantic had failed to meet the requirements for a 

preliminary injunction. Dynalantic Corp. v. United States 

Dep't of Defense, 937 F. Supp. 1, 9 (D.D.C. 1996). The court 

subsequently dismissed the entire case. Dynalantic appealed 

both the denial of its motion for a preliminary injunction and 

judgment for the government on the pleadings. On October 

7, 1996, we dismissed the appeal of the denial of the preliminary injunction as moot, given the dismissal of the entire 

action, and on January 24, 1997, we granted Dynalantic's 

motion to enjoin the APT procurement during the pendency 

of the appeal. Only a few weeks later, after Dynalantic had 

filed its initial appellate brief, the Navy canceled the proposed 

solicitation for the APT procurement.

II.

After canceling the proposed procurement, the government 

suggested that the case had become moot because there was 

"currently no plan to procure the APT through the 8(a) 

program or by any method involving race-conscious elements." (Emphasis added.) Since the government bears 

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able expectation that the alleged violation will recur," Payne 

Enters., Inc. v. United States, 837 F.2d 486, 492 (D.C. Cir. 

1988) (quotations and citations omitted), we directed the 

government to give us further information. The government 

submitted an affidavit from the Director of the Aircraft 

Support Contracts Department, Naval Air Systems Command, who explained that the decision to withdraw the APT 

procurement from the 8(a) program was made because "[t]he 

delay caused by the pending litigation involving the [APT] 

procurement has led to both operational and safety concerns" 

(the UH-1N is the only Marine Corps aircraft for which no 

simulator is presently available for training), and because 

further delays might jeopardize the funding for the APT. 

The government assured us, however, that although the exact 

manner of the APT procurement had yet to be determined, 

"neither the 8(a) program nor any other race-conscious source 

selection procedure will be used as part of the new procurement plan." The government therefore argues that because 

Dynalantic's claims, both before the district court and on 

appeal, have been directed at the APT procurement specifically, the government's decision to withdraw the APT procurement from the 8(a) program leaves no controversy between it and Dynalantic. Any decision from us would be an 

advisory opinion because Dynalantic is now able to compete 

for the APT contractprecisely the remedy it has sought 

throughout this litigation.

Dynalantic is not content with the government's assurances, perhaps perceiving its specialty, constructing simulators, as particularly vulnerable to the 8(a) set-aside program. See infra pp.14-15. It claims that its appeal qualifies 

for both of the exceptions to the mootness doctrine: "the 

common one for "actions capable of repetition yet evading 

review,' and the related but narrower one addressing a 

defendant's voluntary cessation of the offending conduct." 

Clarke v. United States, 915 F.2d 699, 703 (D.C. Cir. 1990) (en 

banc). The case is capable of repetition yet evades review, it 

is argued, because the government plans to continue to set 

aside simulator procurements under the 8(a) program, and 

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curements from the program whenever it is seriously challenged. Alternatively, Dynalantic contends that the government, by withdrawing the APT procurement from the 8(a) 

program, has "manipulat[ed] the judicial process by voluntarily ceasing the complained of activity, and then seeking a 

dismissal of the case, thus securing freedom to return to [its] 

old ways." Clarke, 915 F.2d at 705 (quotations and citations 

omitted).

We need not decide, however, whether appellant's APT 

claim would fall within one of these exceptions because we 

grant Dynalantic's alternative request that we allow it to 

amend its pleadings to raise a general challenge to the 8(a) 

program as administered by the SBA and participated in by 

the Defense Department. Although we are normally hesitant 

to allow a plaintiff resisting a mootness claim later to assert 

broader claims of injury, see, e.g., Clarke, 915 F.2d at 703, 

here it is the government's own actions, taken after Dynalantic had litigated the case belowindeed, after we enjoined the 

APT procurement pending appealthat made Dynalantic's 

claims regarding the APT procurement arguably moot. 

Moreover, although Dynalantic's complaint was directed only 

at the APT procurement, the parties briefed the constitutionality of the 8(a) program below (albeit in the context of the 

APT procurement), the district court considered the constitutionality of the 8(a) program in denying the preliminary 

injunction, see Dynalantic, 937 F. Supp. at 9-10, and much of 

the government's appellate brief is directed at the constitutionality of the program. So the government is hardly prejudiced by permitting Dynalantic to assert its broader claim. 

We think it only fair, given the government's switch of 

position after appellant had filed its opening brief, to allow 

Dynalantic to amend its pleadings, cf. Swan v. Clinton, 100 

F.3d 973, 980 & n.3 (D.C. Cir. 1996) (allowing, on appeal, the 

addition of defendants to the complaint to avoid jurisdictional 

defect of redressability); compare Fair Employment Council 

of Greater Washington, Inc. v. BMC Marketing Corp., 28 

F.3d 1268, 1275 (D.C. Cir. 1994), and as amended the case 

clearly is not moot. The government apparently intends to 

continue to award contracts under the 8(a) program, and 

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Dynalantic's challenge to the program is not mooted merely 

because the challenge to one particular application of it may 

be. See City of Houston v. Department of Housing and 

Urban Dev., 24 F.3d 1421, 1428 (D.C. Cir. 1994).

III.

Dynalantic asserts that it has standing to challenge the 8(a) 

program because it is injured by its inability to bid for 

contracts procured under the program. The government 

presents two basic arguments against Dynalantic's standing. 

The first argument, although put both as an attack on Dynalantic's alleged injury and also, relying on Steffan v. Perry, 41 

F.3d 677 (D.C. Cir. 1994) (en banc), as a challenge to appellant's ability to trace its injury to the alleged legal wrong, is 

based essentially on one notion. Because appellant has never 

sought an 8(a) contract nor could it qualify for such a contract 

even if the race-conscious elements were eliminated (since 

Dynalantic could not claim to be economically disadvantaged 

or prove itself socially disadvantaged), the government's 8(a) 

program causes appellant no injury. The district judge evidently accepted this argument, stating that appellant is "outside the zone of active consideration for award of the contract 

at issue," and relying on Fortec Constructors v. Kleppe, 350 

F. Supp. 171, 172 (D.D.C. 1972) ("plaintiffs have never sought 

to be eligible for the 8(a) program, and never having had an 

8(a) contract to gain, they cannot now allege that a contract 

was lost").

We think this argument is premised on a mischaracterization of Dynalantic's alleged injury. Appellant has no desire 

to participate in the 8(a) program. Cf. Regents of Univ. of 

Cal. v. Bakke, 438 U.S. 265, 281 n.14 (1978) (Opinion of 

Powell, J.) (not fatal to Bakke's standing that he did not seek 

to qualify as "disadvantaged"). Rather, Dynalantic's injury is 

its lack of opportunity to compete for Defense Department 

contracts reserved to 8(a) firms. Dynalantic alleges that "it 

is able and ready to bid on contracts and that a discriminatory policy prevents it from doing so on an equal basis." 

Northern Fla. Chapter of the Associated Gen. Contractors of 

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Am. v. City of Jacksonville, 508 U.S. 656, 666 (1993). See 

also Adarand Constructors, Inc. v. Pena, 115 S. Ct. 2097, 

2104-05 (1995); O'Donnell Constr. Co. v. District of Columbia, 963 F.2d 420, 423 (D.C. Cir. 1992). Nor of course does 

Dynalantic need to demonstrate that it actually would have 

won (or will win) the award of a particular contract. See 

Adarand, 115 S. Ct. at 2105 (citing City of Jacksonville, 508 

U.S. at 666). Dynalantic's injury is "the inability to compete 

on an equal footing in the bidding process, not the loss of a 

contract." City of Jacksonville, 508 U.S. at 666. Dynalantic's allegation that the 8(a) program causes a notinsignificant portion of its potential business opportunities to 

be foreclosed to it clearly makes out an injury.

For similar reasons, the government's reliance on Steffan is 

misplaced. There we said that a midshipman discharged 

from the Navy did not have prudential standing to challenge 

the alleged unconstitutional reach of the Defense Department 

regulations defining homosexuals since he failed to assert that 

he was not covered by the admittedly constitutional portion of 

the definition. See 41 F.3d at 698. Steffan claimed he was 

injured because he had been discharged from the Navy 

because of his status as a homosexual, but he did not claim 

that it was illegal for the Navy to discharge those who 

engaged in homosexual conduct, nor that he had not engaged 

in such conduct. He wished to challenge what he argued was 

the Navy's overbroad definition of homosexual without alleging that he was injured by that overbreadth. In other words, 

the claimed legal wrong was logically severable and did not

or at least was not shown toimpact Steffan. Id. The 

government claims this case is analogous because Dynalantic, 

as not economically or socially disadvantaged (without the 

presumption), could not qualify for the 8(a) program even if 

the race-conscious elements were removed; therefore, it is 

"not the illegal aspect of the action challenged that harm[s] 

[Dynalantic]." Id. at 697. Dynalantic is not an "appropriate 

plaintiff," id. at 698, to bring a case focusing on the constitutionality of the 8(a) programa poor white contractor would 

beand thus Dynalantic has not rested its claim to relief on 

its own rights, but the rights of others.

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As should be apparent, however, this formulation of the 

government's argument framed as causation analysis is, like 

its injury argument, based on the same incorrect description 

of Dynalantic's injury. Dynalantic, as we have noted, does 

not seek to qualify for the 8(a) program, so whether it could 

meet the non-race-conscious requirements is wholly irrelevant. And Steffan rests on a different analytical framework. 

Appellant, unlike Steffan, claims that the entire 8(a) programwhich injures it by foreclosing business opportunitiesis infected by unconstitutional race consciousness and 

therefore its constitutional claim is not logically distinct from 

its injury.

This case might be logically analogous to Steffan if the 

statute created a 5% requirement rather than a goal and that 

requirement were race-neutral, for then the same number of 

contracts necessarily would be set aside regardless of the 

race-conscious aspects of the program, and hence Dynalantic's competitive injury arguably would not be traceable to the 

race-conscious portions. With simply a goal, however, we 

cannot assume that there would be the same number of 8(a) 

contractors absent the allegedly illegal provisions. Of the 

approximately 5,700 firms currently in the 8(a) program, only 

about two dozenless than one-half of one percenthave 

qualified by demonstrating to the SBA by "clear and convincing evidence," 13 C.F.R. § 124.105(c)(1), that they are socially 

disadvantaged; thus, over 99% of the firms qualified as a 

result of race-based presumptions. That means that 99% of 

those companies that have a preferred position to appellant in 

competing for Defense Department contracts received an 

allegedly illegal boost to put them in the preferred category. 

It seems more than likely that without the regulatory presumption there would be considerably fewer 8(a) contractors, 

for such contractors would have to make by "clear and 

convincing evidence" the showing required by 13 C.F.R. 

§ 124.105(c)(1), including that the disadvantage has been 

personally felt and has impacted their entry into the business 

world. Appellant would thus suffer a considerably lessened 

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2 Even if the statute created a 5% requirement, the SBA then 

would be obliged to alter the criteria to meet the requirement, and 

it is impossible to predict whether appellant would want to or could 

qualify under the new criteria. 

injury: a smaller number of 8(a) firms means a smaller 

number of contracts procured under the 8(a) program.2

The government's second argument is directed at the third 

element of standing, redressability. Typically, redressability 

and traceability overlap as two sides of a causation coin, and 

here too the concepts are closely related. Even assuming, 

the argument goes, that the race-conscious portion of the 8(a) 

program as presently configured could be thought to cause 

appellant injury, we could only invalidate that element of the 

program, not the general statutory concept of reserving 

government contracts for those regarded as economically 

disadvantaged. Thus, the government contends that the 8(a) 

statute is not itself race-conscious; only the implementing 

SBA regulations are. And if the regulation were invalidated, 

the statute would remain; therefore, Dynalantic would be 

unable to compete for 8(a) contracts.

We think the government's statutory analysis is rather 

dubious. As appellant points out, the statute treats the 

concept of economic disadvantage as a subset of social disadvantage, not vice versa. The economically disadvantaged are 

defined as those "socially disadvantaged individuals whose 

ability to compete in the free enterprise system has been 

impaired ... as compared to others ... who are not socially 

disadvantaged." 15 U.S.C. § 637(a)(6)(A). And the Act includes as a congressional finding that certain racial groups

the same groups as are identified in 13 C.F.R. 

§ 124.105(b)(1)are socially disadvantaged. See 15 U.S.C. 

§§ 631(f)(1)(B), (C). See also Amendments to Small Business 

Act, Pub. L. No. 95-507 §§ 201, 202, 92 Stat. 1757, 1760-61 

(1978). In this respect, the 8(a) provisions are much like the 

program in Bakke: "a minority enrollment program with a 

secondary disadvantage element." 438 U.S. at 281 n.14 

(Opinion of Powell, J.). Other sections of the Act are likewise 

race-conscious. See, e.g., 15 U.S.C. § 637(d)(3)(C) ("[c]ontracUSCA Case #96-5260 Document #277746 Filed: 06/10/1997 Page 10 of 18
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3 The statute itself actually might require race-conscious regulations. See 15 U.S.C. §§ 631(f)(1)(B), (C) (congressional finding 

that certain racial groups are socially disadvantaged). 

tor shall presume that socially and economically disadvantaged individuals include Black Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, and other 

minorities"). Given these explicit statutory references to 

race, we do not think we can assume, certainly at this stage of 

the litigation, that the statute itself is invulnerable. Nor can 

we assume that Congress would have enacted 8(a) without its 

race-conscious theme or that it would, if the statute were held 

unconstitutional, commit itself to a program of the same scale 

directed only to the economically disadvantaged without regard to race.

In any event, if a favorable decision would lead only to the 

invalidation of the regulations, as we have explained, Dynalantic's injury would still be considerably mitigated. Were 

the regulatory presumption declared unconstitutional, only 

about 24 firms would still be 8(a) participants, thereby reducing almost to zero the possibility that any particular contractincluding any flight simulator contractwould be 

awarded under the 8(a) program. The SBA might theoretically be free (assuming a cooperative Congress) to develop 

new, non-race-conscious regulatory requirements that Dynalantic could not meet,3

but this future possibility is quite 

speculative. It is clear that if the regulations were invalidated, Dynalantic would be able to compete immediately on 

equal footing for virtually all simulator contracts.

The government has not questioned the imminence of any 

injury to Dynalanticwhether future use of the 8(a) program 

will impact on appellantbut it is an issue we should consider. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 

(1992). Dynalantic has performed simulator contracts in the 

past; actually 90% of its total revenue since 1984 stems from 

such contracts with the Defense Department. It contends 

that it is ready, willing, and able to bid for future Defense 

Department contracts. Still, a history of past bidding and a 

current willingness to bid do not demonstrate necessarily that 

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"sometime in the relatively near future," Adarand, 115 S. Ct. 

at 2105, the government will set aside under the 8(a) program 

a contract for which Dynalantic would otherwise attempt to 

bid. After all, the government could decide never again to 

set aside a simulator contract under 8(a).

Taking Dynalantic's allegations at this stage in the litigation as true, however, see Lujan, 504 U.S. at 561, and absent 

a government determination that no future simulator contracts will be awarded under 8(a), we think Dynalantic's 

injury looms close enough to support its standing to pursue 

the case. According to Dynalantic, the number of qualified 

8(a) companies registered at the Naval Air Warfare Center, 

Training Systems Division, which is responsible for buying 

most of the Navy's training equipment and services, went 

from 51 to over 120 between 1993 and 1995, thereby increasing the likelihood that particular contracts will be awarded 

under the 8(a) program. Dynalantic also claims that the 

Center has a policy of setting aside every contract under the 

8(a) program where qualified 8(a) firms are available, that "no 

discretion may be exercised" in deciding whether to set aside 

a contract, and that the award of contracts under the 8(a) 

program is used as a method for awarding certain contracts 

quickly. We are told that many sole source procurements are 

set aside under the 8(a) program without any public notice, 

and thus Dynalantic learns about their award only after the 

fact. Dynalantic has not pointed to any particular procurement other than the APT, but this is understandable since 

when Dynalantic initially filed its various pleadings they were 

directed at the APT contract. We think appellant has demonstrated the likelihood that the government will, sometime 

in the near future, attempt to procure under the 8(a) program 

another contract for which Dynalantic is ready, willing, and 

able to bid.

* * * *

In sum, the interdependency of various provisions of the 

Act and the 8(a) regulatory scheme demonstrates that DynaUSCA Case #96-5260 Document #277746 Filed: 06/10/1997 Page 12 of 18
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lantic's injuryits inability to compete on equal footing with 

8(a) participantsis traceable to the 8(a) program and is 

likely to be redressed by a decision holding all or part of the 

program unconstitutional. Dynalantic thus has standing to 

challenge the constitutionality of the 8(a) program, and the 

judgment of the district court is reversed.

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EDWARDS, Chief Judge, dissenting: Under the so-called 

"8(a)" program, agencies like the Department of Defense 

have been authorized by Congress to set aside certain 

government-contract work for socially and economically disadvantaged businesses that are otherwise qualified to perform the work. The statutory set-aside is not limited in 

terms of race, so it does not prescribe a benefit that is 

available only to members of racial minorities. Not surprisingly, appellant does not appear to doubt that Congress can, 

consistent with the Constitution, set aside certain contracts 

for socially and economically disadvantaged vendors. Rather, 

appellant asserts that the statute is constitutionally infirm 

because the regulations implementing the statute create a 

rebuttable presumption in favor of certain racial minorities. 

Appellant's claim rests on absurd reasoning, which proves 

only one thing: appellant has no standing to challenge the 

statutory scheme supporting the 8(a) program.

Appellant's challenge to the particular application of the 

8(a) program in connection with the disputed APT procurement is moot, because the government canceled its bid solicitation and gave adequate assurances that 8(a) would not be 

used again should solicitation be reopened. Thus, appellant 

has prevailed on the precise issue that prompted this law suit. 

However, applicant now smells blood and has decided that, so 

long as it is already in court, it might just as well use the 

occasion to attack the entire statute. Even assuming that 

appellant's complaint can be read to subsume a statutory 

challenge (which I doubt) and even conceding that appellant 

can amend its complaint to include this claim, it remains clear 

that appellant has no standing to raise a facial challenge to 

the statute.

Appellant has not demonstrated that it is socially and 

economically disadvantaged as required by the statute. Appellant, thus, cannot show the requisite causation and redressability to satisfy the Article III standing requirements 

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sumption in the regulations. Even if the court strikes down 

the allegedly unconstitutional race-based "presumption" in 

the regulations that implement the 8(a) program, appellant 

cannot show how its position would be improved.

In order to participate in the 8(a) program, a vendor must 

be socially and economically disadvantaged, and these statutory criteria would remain in effect even if the regulatory 

presumption is deemed unlawful. Appellant concedes that it 

is not socially and economically disadvantaged. It follows, 

therefore, that appellant has no standing to challenge the 

statute, which on its face is lawful and under which appellant 

can claim no benefits.

I. ANALYSIS

It is well established that, in order to satisfy the standing 

requirements of Article III, a plaintiff must demonstrate (1) 

that it has suffered injury that is concrete and particularized; 

(2) that the injury is fairly traceable to the conduct of which it 

complains; and (3) that the injury is likely to be redressed by 

a court decision in its favor. See Lujan v. Defenders of 

Wildlife, 504 U.S. 555, 560-61 (1992).

Appellant's alleged injury here is the inability to compete 

for 8(a) contracts. Appellant claims that the regulatory 

presumption that racial minorities are socially disadvantaged 

causes it injury, because the presumption effectively precludes it from competing with minority-owned businesses for 

government contracts under the 8(a) program. However, it is 

conceded that appellant would remain ineligible to bid on 8(a) 

contracts even if the regulatory presumption were removed, 

so it is clear that neither the causation nor redressability 

requirements of standing are satisfied.

A. The Statutory Structure of the 8(a) Program

The legislation that creates the 8(a) set-aside does not 

define social and economic disadvantage in terms of race. 

Socially disadvantaged individuals are defined as "those who 

have been subjected to racial or ethnic prejudice or cultural 

bias because of their identity as a member of a group without 

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regard to their individual qualities." 15 U.S.C. § 637(a)(5) 

(1994). Economically disadvantaged individuals are defined 

as "those socially disadvantaged individuals whose ability to 

compete in the free enterprise system has been impaired due 

to diminished capital and credit opportunities as compared to 

others in the same business area who are not socially disadvantaged. In determining the degree of diminished credit 

and capital opportunities the Administration shall consider, 

but not be limited to, the assets and net worth of such socially 

disadvantaged individual." 15 U.S.C. § 637(a)(6)(A) (1994). 

Thus, the statute at issue creates no race-based barrier to 

appellant's participation in the 8(a) program, because all

socially and economically disadvantaged individuals, defined 

without regard to race, are eligible for the program. Furthermore, consideration of social and economic disadvantage 

is not impermissible on its face, even if a disproportionate 

number of the parties who benefit from the standard are 

racial minorities. That minorities are disproportionately favored by such a program merely shows that minorities are 

disproportionately burdened by social and economic disadvantages. If Congress may consider "social and economic disadvantage" in the awarding of contracts, it surely may adopt a 

set-aside to give relief to those who qualify on these terms.

During oral argument in this case, the suggestion was 

made that use of a "social and economic disadvantage" standard is essentially the same as providing that "only rich white

business people will get procurement jobs." This suggestion 

is completely off the mark: the disputed "social and economic 

disadvantage" standard includes both whites and blacks, 

whereas the hypothetical standard favoring "rich white business people" expressly excludes blacks. No doubt a program 

preferring "rich white business people" would fail constitutional scrutiny, but to acknowledge this is to say absolutely 

nothing about the merits of the 8(a) set-aside.

B. The Regulatory Structure of the 8(a) Program

The regulations that implement Congress's statutory directive create a rebuttable presumption that certain racial 

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minorities are socially disadvantaged. See 13 C.F.R. 

§ 124.105(b)(1) (1996). Appellant claims that application of 

the presumption results in impermissible race bias and makes 

it clear that DynaLantic has standing to sue. Appellant is 

wrong on both counts.

First, the disputed presumption is "rebuttable," thus not 

every minority is entitled to 8(a) status. Furthermore, even 

if minorities gain an advantage from the presumption, they 

(like all prospective 8(a) applicants) must show "economic" 

disadvantage. See 13 C.F.R. § 124.106 (1996). No applicant 

gains access to the 8(a) program merely because of minority 

status, for all must pass the test of "economic disadvantage."

Second, even assuming, arguendo, that the presumption 

gives an impermissible advantage to minority applicants (and 

thus must be struck down), this would still afford no relief for 

appellant. The regulatory presumption is not a statutory 

mandate, so the 8(a) program would still survive without the 

presumption. The statutory directive focuses on "social and 

economic disadvantage," not race, and these criteria are 

concededly lawful. Because appellant is not (and does not 

seek to be) socially or economically disadvantaged, no redress 

would come by virtue of the regulatory presumption being 

struck down. Appellant still would be ineligible to compete 

for 8(a) work.

At oral argument, the suggestion was made that, absent 

the presumption, procurement work formerly assigned to the 

8(a) category would be made available to non-8(a) applicants 

like appellants. But there is absolutely nothing in the record 

to support this suggestion. Absent the presumption, the pool 

of work available for 8(a) set-asides will remain the same; 

and this work will be open for bids and awarded to applicants 

who satisfy the statutory "social and economic disadvantage" 

criteria. Appellant does not claim to satisfy these criteria, so 

it will gain nothing if the presumption is declared unlawful. 

Appellant, thus, fails to meet the causation and redressability 

requirements of standing, for it has not shown that any injury 

that it allegedly suffers from the 8(a) program results from 

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the race-based presumption nor that removal of the racebased presumption would remedy its injury.

II. CONCLUSION

Appellant's challenge to the particular APT procurement 

that gave rise to this case should be dismissed as moot. 

Appellant's belated facial challenge to the statutory 8(a) 

program should be dismissed for lack of standing.

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