It has long been the policy of the federal government to assist minority and other "socially and economically disadvantaged" small businesses become fully competitive and viable business concerns. The objective has largely been pursued through the federal procurement process by allocating federal assistance and contracts to foster disadvantaged business development. Federal assistance has taken a variety of forms, including targeting procurement contracts and subcontracts for disadvantaged or minority firms, management and technical assistance grants, educational and training support, and surety bonding assistance. Present day set-aside programs authorizing preferential treatment in the award of government contracts to disadvantaged business enterprises (DBEs), or socially and economically disadvantaged small businesses, originated in § 8(a) of the Small Business Act of 1958. Initially, the Small Business Administration (SBA) utilized its § 8(a) authority to obtain contracts from federal agencies and subcontract them on a noncompetitive basis to firms agreeing to locate in or near disadvantaged areas and provide jobs for the unemployed and underemployed. The § 8(a) contracts awarded under this program were not restricted to minority-owned firms and were offered to all small firms willing to hire and train the unemployed and underemployed in five metropolitan areas, as long as the firms met the program's other criteria. As the result of a series of executive orders by President Nixon, the focus of the § 8(a) program shifted from job-creation in low-income areas to minority small business development through increased federal contracting with firms owned and controlled by socially and economically disadvantaged persons. With these executive orders, the executive branch was directed to promote minority business enterprise and many agencies looked to SBA's § 8(a) authority to accomplish this purpose. The administrative decision to convert § 8(a) into a minority business development program acquired a statutory basis in 1978 with the passage of P.L. 95-507 , which broadened the range of assistance that the government—SBA, in particular—could provide to minority businesses. Section 8(a), or the "Minority Small Business and Capital Ownership Development" program, authorizes SBA to enter into all kinds of construction, supply, and service contracts with other federal departments and agencies. The SBA acts as a prime contractor and then subcontracts the performance of these contracts to small business concerns owned and controlled by "socially and economically disadvantaged" individuals, Indian Tribes or Hawaiian Native Organizations. Applicants for § 8(a) certification must demonstrate "socially disadvantaged" status or that they "have been subjected to racial or ethnic prejudice or cultural bias because of their identities as members of groups without regard to their individual qualities." The Small Business Administration "presumes," absent contrary evidence, that small businesses owned and operated by members of certain groups—including Blacks, Hispanics, Native Americans, and Asian Pacific Americans—are socially disadvantaged. Any individual not a member of one of these groups must "establish individual social disadvantage by a preponderance of the evidence" in order to qualify for § 8(a) certification. The § 8(a) applicant must, in addition, show that "economic disadvantage" has diminished its capital and credit opportunities, thereby limiting its ability to compete with other firms in the open market. Accordingly, while disadvantaged status under the SBA includes a racial component, in terms of presumptive eligibility, it is not restricted to racial minorities, but also includes persons subjected to "ethnic prejudice or cultural bias" who are able to satisfy specified regulatory criteria. It also excludes businesses owned or controlled by persons who, regardless of race, are "not truly socially and/or economically disadvantaged." The "Minority Small Business Subcontracting Program" authorized by § 8(d) of the Small Business Act codified the presumption of disadvantaged status for minority group members that applied by SBA regulation under the § 8(a) program. Section 8(d) requires prime contractors on all federal contracts that exceed the simplified acquisition threshold, are performed in the United States, and are not for personal services to negotiate a "subcontracting plan" with the procuring agency which includes "percentage goals" for utilization of small socially and economically disadvantaged firms. Award of the contract hinges upon the contractor's agreeing to a plan that is also acceptable to the agency, and each contract must include a clause which states that "[t]he contractors shall presume that socially and economically disadvantaged individuals include Black Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, and other minorities, or any other individual found to be disadvantaged by the Administration pursuant to § 8(a) ... " Section 8(d) also allows the government to collect liquidated damages from contractors that fail to comply in good faith with their plans. P.L. 95-507 , which created these § 8(d) programs further required that all federal agencies with procurement powers establish annual percentage goals for the award of procurement contracts and subcontracts to small disadvantaged businesses (SDBs). A decade later, Congress enacted the Business Opportunity Development Reform Act of 1988, directing the President to set annual, government-wide procurement goals of at least 20% for small businesses and 5% for disadvantaged businesses, as defined by the SBA. Simultaneously, federal agencies were required to continue to adopt their own goals, compatible with the government-wide goals, in an effort to create "maximum practicable opportunity" for small disadvantaged businesses to sell their goods and services to the government. The goals may be waived where not practicable due to unavailability of DBEs in the relevant area and other factors. Federal Acquisition Act amendments adopted in 1994 amended the 5% minority procurement goal, and the minority subcontracting requirements in § 8(d), to specifically include "small business concerns owned and controlled by women" in addition to "socially and economically disadvantaged individuals." Additionally, statutory "set-asides" and other forms of preference for "socially and economically disadvantaged" firms and individuals, following the Small Business Act or other minority group definition, have frequently been added to specific grant or contract authorization programs. "Goals" or "set-asides" for minority groups, women, and other "disadvantaged" individuals have routinely been part of federal funding measures for education, defense, transportation and other activities over much of the last two decades. Early on, Congress established goals for participation of small disadvantaged businesses in procurement for the Department of Defense (DOD), National Aeronautics and Space Administration (NASA), and the Coast Guard. It also enacted the Surface Transportation Assistance Act of 1982 (STAA), the Surface Transportation and Uniform Relocation Assistance Act of 1987 (STURAA), the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA), and the Transportation Equity Act for the 21 st Century (TEA-21), each of which contained a 10% minority or disadvantaged business participation goal on federally funded projects. Sometimes, Congress has coupled these goals with authority to meet them, as was the case with the goals for DOD, NASA, and the Coast Guard. Congress authorized these agencies to apply a price evaluation preference of up to 10% to bids submitted by businesses other than SDBs in order to meet their goals. Recently, however, the Federal Circuit held that DOD's SDB program was unconstitutional. Litigation surrounding racial preferences in federal contracting has followed a convoluted course since 1995, when the Supreme Court settled the constitutional parameters of the issue but avoided a decision of the merits in Adarand Constructors Inc. v. Pena (Adarand I) . By the time it returned to the High Court six years later, as Adarand Constructors Inc. v. Mineta , the legal and factual framework of the case was considerably altered by multiple lower court decisions and appeals, and by changes in the plaintiff's legal standing, the details of the challenged federal program, and regulatory reforms to "amend, not end" federal affirmative action by the former Clinton Administration. To the chagrin of many legal observers, the Court in 2001 once again sidestepped the constitutional issues posed by the Adarand case and, after agreeing to reconsider the controversy, dismissed the appeal as "improvidently granted." The object of the Court's latest action—or inaction—was the Tenth Circuit's two-part ruling in Adarand Constructors v. Slater (Adarand III). The federal appeals court there invalidated a federal highway program of financial incentives to promote minority and "disadvantaged" small business utilization in force at the time of Adarand I . But as revised and amended in 1997, the program was found to be narrowly tailored to a compelling governmental interest and passed constitutional muster. Prior to Adarand , the U.S. Supreme Court had narrowly approved of congressionally mandated racial preferences to allocate the benefits of contracts on federally sponsored public works projects in Fullilove v. Klutznick , while generally condemning similar actions taken by state and local entities to promote public contracting opportunities for minority entrepreneurs in City of Richmond v. J.A. Croson Co. These disputes generated divergent views as to whether state affirmative action measures for the benefit of racial minorities were subject to the same "strict scrutiny" as applied to "invidious" racial discrimination under the Equal Protection Clause, an "intermediate" standard resembling the test for gender-based classifications, or simple rationality. In Croson , a 5 to 4 majority resolved that while "race-conscious" remedies could be legislated in response to proven past discrimination by the affected governmental entities, "racial balancing" untailored to "specific" and "identified" evidence of minority exclusion was impermissible. Until Adarand , however, a different, more lenient standard was thought to apply to use of racial preferences in federally conducted activities.