Engineering v. Metropolitan Dade

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

________________________

No. 96-5274

________________________

D.C. Docket No. 94-1848-CV-KLR

ENGINEERING CONTRACTORS ASSOCIATION OF SOUTH FLORIDA INC.,

ASSOCIATED GENERAL CONTRACTORS OF AMERICA, South Florida Chapter,

Inc., GOLD COAST ASSOCIATED BUILDERS AND CONTRACTORS, INC.,

CONSTRUCTION ASSOCIATION OF FLORIDA, INC., UNDERGROUND CONTRACTORS

ASSOCIATION OF SOUTH FLORIDA, INC., AIR CONDITIONING AND

REFRIGERATION ASSOCIATION, INC.,

Plaintiffs-Appellees,

versus

METROPOLITAN DADE COUNTY, JOAQUIN AVINO, County Manager of

Metropolitan Dade County, BETTY FERGUSON, JAMES BURKE, ARTHUR E.

TEEL, JR., SHERMAN S. WINN, BRUCE KAPLAN, PEDRO REBOREDO, MAURICE

FERRE, LARRY HAWKINS, DENNIS MOSS, JAVIER SOUTO, MIGUEL DE LA

PORTILLA, ALEXANDER PENELAS, NATACHA MILLAN, Individually and in

their official capacities as members of the Board of County

Commissioners,

Defendants-Appellants,

BLACK BUSINESS ASSOCIATION, INC., ALLIED MINORITY CONTRACTORS

ASSOCIATION, INC., NATIONAL ASSOCIATION FOR THE ADVANCEMENT OF

COLORED PEOPLE, Miami Dade Branch,

Intervenors-Defendants-Appellants.

________________________

Appeals from the United States District Court

for the Southern District of Florida

________________________

(September 2, 1997)

Before CARNES, Circuit Judge, and FAY and CAMPBELL*, Senior Circuit

Judges.

______________________

*Honorable Levin H. Campbell, Senior U.S. Circuit Judge for

the First Circuit, sitting by designation.

CARNES, Circuit Judge:

This appeal involves an Equal Protection Clause challenge to

three substantially identical affirmative action programs

administered by Dade County, Florida. Those programs provide for

the use of race-, ethnicity-, and gender-conscious measures in

awarding County construction projects. Specifically, the programs

establish preferences for construction enterprises owned and

controlled by blacks, Hispanics, or women. The district court

declared all three programs unconstitutional and permanently

enjoined their operation. See Engineering Contractors Ass'n v.

Metropolitan Dade County, 943 F. Supp. 1546 (S.D. Fla. 1996). We

affirm.

I. BACKGROUND FACTS AND PROCEDURAL HISTORY

The following summary of undisputed facts, as well as the

procedural history of this case, is drawn primarily from the

district court's thorough opinion, see 943 F. Supp. at 1551-53.

A. UNDISPUTED FACTS

Three affirmative action programs enacted by the Dade County

Board of Commissioners are at issue in this appeal: (1) the Black

Business Enterprise ("BBE") program, enacted in 1982 and most

recently amended in 1994; (2) the Hispanic Business Enterprise

("HBE") program, enacted in 1994; and (3) the Women Business

Enterprise ("WBE") program, enacted in 1994. For the sake of

convenience, we adhere to the district court's convention of

2

referring to the programs collectively as the "MWBE" (Minority &

Women Business Enterprise) programs.

To qualify to participate in one of the MWBE programs, a

business must be owned and controlled by one or more black,

Hispanic, or female individuals, and it must have an actual place

of business in Dade County. MWBE joint ventures must have at least

one member that is certified under one of the three MWBE programs.

Additionally, each MWBE participant must demonstrate that it does

not exceed the size limits for "small business concerns" as defined

by the Small Business Administration of the United States

Department of Commerce. However, an MWBE participant that exceeds

the size limit may retain its certification if it demonstrates that

"it continues to experience the kinds of racial [or gender]

discrimination addressed by [the programs]." Metropolitan Dade

County Code § 2-8.2(3)(e).

The MWBE programs apply to certain classes of County contracts

for which "participation goals" have been set. This case concerns

only construction contracts, which means that only the following

three Standard Industry Classification ("SIC") classes of County

contracts are involved:

(1) SIC 15: General Building Construction;

(2) SIC 16: Heavy Construction other than Building

Construction;

(3) SIC 17: Specialty Trade Construction (including

electrical, plumbing, heating,

ventilation, and air conditioning).

For the foregoing classes of contracts, the County has set

participation goals of 15% for BBEs, 19% for HBEs, and 11% for

3

WBEs. The participation goals apply to all construction contracts

in excess of $25,000 that are funded in whole or in part by the

County. The County is required to make every reasonable effort to

achieve the participation goals, and may use any of the following

five "contract measures" to do so:

(1) Set Asides -- Under this measure a contract is set aside

for bidding solely among MWBEs. In general, the County

may use the set-aside measure if there are at least three

MWBE businesses available to perform the contract.

However, the County also may waive competitive bidding if

there are at least two MWBEs available, if neither of

those MWBEs has been awarded a County contract for like

goods or services in the last three years, and a price

analysis is done to ensure the price is competitive.

(2) Subcontractor Goals -- This measure requires a prime

contractor to subcontract a certain percentage of work to

MWBEs. The percentage is determined on a case-by-case

basis. A waiver is available if the prime contractor can

demonstrate that MWBEs are not available to do the work

at a competitive price. However, the inability of an

MWBE to obtain bonding is not considered grounds for a

waiver.

(3) Project Goals -- With this measure, the County creates

a pool of MWBE subcontractors from which it selects firms

for specified types of work under County contracts.

4

(4) Bid Preferences -- This measure artificially "reduces" an

MWBE bid price by as much as ten percent for purposes of

determining the lowest bid. The actual price the County

pays for the work is unaffected by this “reduction.”

(5) Selection Factors -- This measure is similar to a bid

preference, but operates on factors other than price.

For instance, when bid evaluation procedures assign

weights to various factors, MWBE performance on those

factors may be boosted by up to 10%.

Once a contract is identified as being covered by a

participation goal, it is submitted to a review committee for

determination of whether a contract measure should be applied. The

County Commission makes the final determination on that issue, and

its decision is appealable to the County Manager. The County

Manager's decision is final, unless the County Commission exercises

its discretion to review and override it.

Annually, the MWBE programs are reviewed for their efficacy.

Every five years, when the "Survey of Minority-Owned Business

Enterprises" is published by the Census Bureau, the County

Commission must decide whether to continue the programs.

B. PROCEDURAL HISTORY

The Dade County BBE program has been challenged before. In

South Florida Chapter of Associated General Contractors v.

Metropolitan Dade County, 723 F.2d 846 (11th Cir. 1984), this Court

upheld the program in its entirety. We did so applying the

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standard enunciated by Chief Justice Burger in the principal

opinion in Fullilove v. Klutznick , 448 U.S. 448, 100 S. Ct. 2758

(1980), which was neither strict scrutiny nor any other traditional

standard of equal protection review.

Five years after we upheld Dade County's BBE program, the

Supreme Court pulled the props out from under our decision by

abandoning the Fullilove standard insofar as state and local race-

conscious remedial programs are concerned. Such programs must

satisfy the exacting strict scrutiny standard, the Court held in

City of Richmond v. J.A. Croson Co., 488 U.S. 469, 493-95, 109 S.

Ct. 706, 721-22 (1989) (four-member plurality opinion); accord id.

at 520, 109 S. Ct. at 735-36 (Scalia, J., concurring) (agreeing

that “strict scrutiny must be applied to all governmental

classifications by race”). The Croson decision prompted several

non-minority plaintiffs to bring a second constitutional challenge

to Dade County's BBE program. That case was tried in federal

district court July 1992, but before the court rendered a final

judgment the parties reached a settlement and stipulated to a

dismissal with prejudice. That abortive litigation is not without

effect on the present case, however, because by stipulation, the

evidence from that settled case has been made a part of the record

in this case.

This case was filed in September 1994 by six trade

associations whose members regularly perform work, either as prime

contractors or subcontractors, on County projects. The complaint

named only the County and certain related parties as defendants.

6

However, three entities have intervened as party defendants: (1)

the Black Business Association, Inc.; (2) the Allied Minority

Contractors Association, Inc.; and (3) the Miami Dade Branch of the

National Association for the Advancement of Colored People. The

plaintiffs challenge the County's MWBE programs only as they apply

to the construction industry, i.e., only with respect to SIC 15,

16, and 17.

The district court held a four-day bench trial in December

1995 and heard closing arguments on April 18, 1996. On September

17, 1996, the district court entered a comprehensive opinion

containing findings of fact and conclusions of law. Engineering

Contractors Ass'n v. Metropolitan Dade County, 943 F. Supp. 1546

(S.D. Fla. 1996).

Applying strict scrutiny, the district court found that the

County lacked the requisite "strong basis in evidence" to support

the race- and ethnicity-conscious measures contained in the BBE and

the HBE programs. Applying intermediate scrutiny to the WBE

program, the district court found that the County had presented

insufficient probative evidence to support its stated rationale for

implementing a gender preference. Therefore, the district court

concluded that the County had failed to demonstrate a "compelling"

interest in remedying race or ethnicity discrimination in the Dade

County construction market (for the BBE and HBE programs), and that

7

it likewise had failed to demonstrate an "important" interest in

remedying gender discrimination through its WBE program.1

In a separate analysis, the district court assumed the

existence of a sufficient evidentiary basis to support the

existence of the MWBE programs in order to examine whether the

programs were sufficiently related to the interests they purported

to serve. The court held that the BBE and HBE programs were not

narrowly tailored to serve a compelling governmental interest in

remedying past or present discrimination on the basis of race or

ethnicity, even if sufficient evidence to support the existence of

those programs had been demonstrated. Likewise, the district court

held that the WBE program was not substantially related to an

important governmental interest in remedying past or present

discrimination, even if the evidence had been sufficient to support

the existence of that program.

The district court followed its opinion with a final judgment

that enjoined the County from continuing to operate its MWBE

programs for construction work. This appeal followed.

II. ISSUES

1

The preceding paragraph describes the substance of the

district court's conclusions, although the district court's opinion

phrases those conclusions a little differently. In its opinion,

the district court holds that the BBE and HBE programs fail strict

scrutiny, and that the WBE program fails under intermediate

scrutiny, because the “evidence presented by the defendants does

not constitute an adequate showing of discrimination.” 943 F.

Supp. at 1584. Combining those holdings together with the district

court's statement of the legal standards governing strict and

intermediate scrutiny, 943 F. Supp. at 1554-56, we understand the

district court's conclusions to be as we have described them.

8

Despite the evidentiary complexity of this case, this appeal

presents only four major issues. The standards of review

applicable to those issues are set out in Part III of this opinion,

but before we get there we will briefly outline in this Part what

those issues are and describe our organizational approach for

considering them.

The first issue is whether the plaintiffs have standing. For

the reasons discussed in Part IV, we conclude that they do, which

necessitates that we address the remaining issues, i.e., the merits

issues. We begin addressing the merits with a discussion in Part

V of the legal standards for scrutinizing affirmative action

programs of the type involved in this case.

That leads into Part VI of this opinion, which involves the

second and third major issues presented in this appeal. The second

major issue is whether the district court erred in finding that the

County lacked a “strong basis in evidence” to justify the existence

of the BBE and HBE programs. Similarly, the third major issue is

whether the district court erred in finding that the County lacked

a sufficient probative basis in evidence to justify the existence

of the WBE program. To the extent practicable, we discuss

concurrently the evidence related to those two issues, because much

of the statistical evidence in this case is derived from studies

related to more than one MWBE program. As we review that evidence,

we will separately consider each MWBE program in light of the

standard of review applicable to it.

9

Finally, the fourth major issue, which we discuss in Part VII,

is whether the MWBE programs are adequately tailored to the

interests they are purported to serve. Because we conclude that

the district court did not clearly err in finding that the MWBE

programs lack a constitutionally sufficient evidentiary foundation,

our analysis of this issue is limited to the most obvious problems

associated with the County's tailoring of the MWBE programs. As

will be seen, there are several.

Our conclusion is contained in Part VIII.

III. STANDARDS OF REVIEW

The legal standards by which a race-, ethnicity-, or gender-

conscious affirmative action program is to be evaluated are

discussed in Part V of this opinion. Applying those standards in

the first instance is within the province of the district court,

not this Court. Our province is to review the decisions and

judgment of the district court, but our authority to do so is

confined by the standards of review. We examine them below,

separately discussing the standard of review applicable to each of

the four major issues in this appeal.

A. STANDING

Standing is a jurisdictional question. “The federal courts

are under an independent obligation to examine their own

jurisdiction, and standing 'is perhaps the most important of [the

jurisdictional] doctrines.'” FW/PBS, Inc. v. City of Dallas, 493

U.S. 215, 231, 110 S. Ct. 596, 607 (1990) (quoting Allen v. Wright,

10

468 U.S. 737, 750, 104 S. Ct. 3315, 3324 (1984)) (alteration in

FW/PBS). As with all jurisdictional issues, this Court reviews

standing de novo. See, e.g., McKusick v. City of Melbourne, Fla.,

96 F.3d 478, 482 (11th Cir. 1996) (citation omitted).

B. EVIDENTIARY FOUNDATION OF THE BBE AND HBE PROGRAMS

Both the Supreme Court and this Court have held that a

district court makes a factual determination when it determines

whether there exists a sufficient evidentiary basis justifying

affirmative action on the basis of race or ethnicity. See Wygant

v. Jackson Bd. of Educ., 476 U.S. 267, 277, 106 S. Ct. 1842, 1849

(1986) (“[T]he trial court must make a factual determination that

the employer had a strong basis in evidence for its conclusion that

remedial action was necessary.”); Ensley Branch, NAACP. v. Seibels,

31 F.3d 1548, 1565 (11th Cir. 1994) (same); Howard v. McLucas, 871

F.2d 1000, 1007 (11th Cir. 1989) (same).

We review a district court's factual findings only for clear

error. See Fed. R. Civ. P. 52(a) (mandating that “[f]indings of

fact shall not be set aside unless clearly erroneous”). The

Supreme Court has provided considerable guidance on how the

appellate courts are to apply the clearly erroneous standard.

Because this appeal is concerned chiefly with whether the district

court clearly erred in finding that the County had failed to

demonstrate a sufficient evidentiary foundation to justify the

existence of the MWBE programs, a detailed review of the Supreme

Court's guidance on the clearly erroneous standard is warranted.

11

We cannot hold a district court's finding of fact is clearly

erroneous unless, in view of the entire record, we are “left with

a definite and firm conviction that a mistake has been committed.”

Anderson v. City of Bessemer City, 470 U.S. 564, 573, 105 S. Ct.

1504, 1511 (1985) (citation and internal quotation marks omitted).

That is an exacting standard, purposefully designed to restrict

second guessing in the factfinding arena. As the Supreme Court has

explained:

This standard plainly does not entitle a reviewing

court to reverse the finding of the trier of fact simply

because it is convinced that it would have decided the

case differently. ... If the district court's account of

the evidence is plausible in light of the record viewed

in its entirety, the court of appeals may not reverse it

even though convinced that had it been sitting as the

trier of fact, it would have weighed the evidence

differently. Where there are two permissible views of

the evidence, the factfinder's choice between them cannot

be clearly erroneous.

Id. at 573-74, 105 S. Ct. at 1511 (citations omitted).

Furthermore, our scope of review is no less circumscribed when the

district court's factfindings rest on physical or documentary

evidence instead of credibility determinations. See id. at 574,

105 S. Ct. at 1511-12.

The Supreme Court has explained with unmistakable clarity our

duty in evaluating the district court's factfindings in this case.

That duty most emphatically is not to decide whether we agree with

the district court's view of the evidence. Instead, we must

determine only whether the district court's view of the evidence,

as reflected in its factfindings, is a permissible one, i.e., a

plausible one in light of the entire record.

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C. EVIDENTIARY FOUNDATION OF THE WBE PROGRAM

Neither the Supreme Court nor this Court has squarely held

that a district court makes a factual determination when it

determines whether there exists a sufficient evidentiary basis

justifying affirmative action on the basis of gender. Although we

have had occasion to review the evidentiary foundation of gender-

conscious affirmative action, we have conducted that review without

specifically explaining whether we were reviewing the evidence de

novo or instead reviewing the district court's view of the evidence

for clear error.

For example, in Ensley Branch, 31 F.3d at 1581, we reviewed

the evidentiary foundation of a gender-conscious affirmative action

program and concluded that “[t]he record before us contains

substantial anecdotal and statistical evidence of past

discrimination against women.” Although we did not explain

specifically in that case that we were reviewing the district

court's evidentiary factfindings, instead of reviewing the evidence

de novo, a close reading of the opinion reveals the nature of our

review. We examined the district court'sfindings that “[f]or many

years announcements for positions as police patrolman and

firefighter were restricted to males only” and that “women were

grossly underrepresented in a variety of City positions.” Id.

(citation and internal quotation marks omitted). After reviewing

those factual findings, we concluded: “These and related findings

by the district court justify the district court's finding that

there is more than ample reason for the Personnel Board and the

13

City of Birmingham to be concerned that they would be in time held

liable for discrimination.” Id. (emphases added) (citations and

internal quotation marks omitted).

As a close look at our Ensley Branch opinion reveals, when we

review the evidentiary basis of a gender-conscious affirmative

action program, we do not review the evidence de novo. Instead, we

review the evidence to determine whether it can “justify the

district court's finding” that the gender-conscious affirmative

action program is or is not rooted in evidence of current or past

discrimination in the relevant economic sphere. In other words,

the same clearly erroneous standard governs our review of the

evidentiary sufficiency issue involving gender-conscious programs

that governs our review of the evidentiary sufficiency issue

involving race- or ethnicity-conscious programs.

That is true even though, as we will explain in more detail

later, gender-conscious affirmative action programs may rest safely

on a weaker evidentiary foundation than race- or ethnicity-

conscious programs. For gender-conscious programs, we decide if

the district court clearly erred in determining whether the

government had a sufficient probative basis in evidence to justify

affirmative action. For race- or ethnicity-conscious programs, we

decide if the district court clearly erred in determining whether

the government had a strong basis in evidence to justify

affirmative action. Because in both circumstances the district

court makes the same basic type of determination (factual), it

14

would be illogical to apply a different standard of review. We

review both determinations under the clearly erroneous standard.

D. "NARROW TAILORING" AND "SUBSTANTIAL RELATIONSHIP"

A district court applies law to the facts when it determines

whether a race- or ethnicity-conscious remedy is narrowly tailored

to serve a compelling government interest, and whether a gender-

conscious remedy bears a substantial relation to an important

governmental interest. After identifying the factual predicate for

the affirmative action program in question, the district court

makes a legal determination about whether the program's terms are

sufficiently tied to its legitimate goals to pass constitutional

muster. This Court reviews de novo a district court's application

of law to the facts. See Simmons v. Conger, 86 F.3d 1080, 1084

(11th Cir. 1996).

We now apply the foregoing standards of review to the issues

in this appeal, beginning with the standing issue.

IV. STANDING

The intervenors' have mounted a two-pronged attack on the

plaintiffs' standing. First, the intervenors argue that because

the plaintiffs failed to put on any evidence that the were or would

be affected by each of the MWBE programs, they had no standing to

challenge each program. We disagree.

The undisputed facts reveal that the plaintiffs are six trade

associations whose members regularly perform work for the County.

There are a number of companies within each association, and the

15

intervenors stipulated that the County "will likely exclude in the

future -- based on racial, ethnic and sexual criteria --

plaintiffs' non-[MWBE] members from bidding for certain contracts.”

That stipulation covered all three programs, and relieved

plaintiffs of the duty to put on any evidence that they would be

affected by any or all of the three programs. The very purpose of

a stipulation is to relieve a party of the burden it would

otherwise have of introducing evidence to prove a fact. See Fed.

R. Civ. P. 16(c)(3) (providing that at the pretrial conference the

district court may take action directed toward “obtaining

admissions of fact and of documents which will avoid unnecessary

proof”).

As this Court recently explained, parties may not stipulate to

jurisdiction, but they may stipulate to facts that bear on our

jurisdictional inquiry. See West Peninsular Title Co. v. Palm

Beach County, 41 F.3d 1490, 1492 n.4 (11th Cir.), cert. denied, 116

S. Ct. 338 (1995). When the record contains such stipulations, we

look to the record to determine whether “the stipulated facts give

rise to jurisdiction.” Id. (emphasis omitted). Here, the parties'

stipulation that the plaintiffs likely will be excluded from

performing future contracts with the County due to the race-,

ethnicity-, and gender-conscious criteria of the MWBE programs is

the end of the inquiry as to whether the plaintiffs likely will be

adversely affected by all three affirmative action programs at

issue in this case.

16

The second prong of the intervenors' attack on the plaintiffs'

standing is similar to the first. The intervenors contend that

because the plaintiffs failed to establish -- by stipulation or

evidence -- which of the five “contract measures” likely will

adversely affect them, they lack standing to challenge the MWBE

programs in toto. We disagree. The existence of each the programs,

including all of its component parts, must withstand the appropriate

level of constitutional scrutiny if that program is to be upheld. Either

a program is grounded on a proper evidentiary factual predicate or it is

not. If it is, then that program sails on to the next stage of the

analysis, where each component contract measure is tested against the

“narrow tailoring” and “substantial relationship” requirements. On the

other hand, if a program is not grounded on a proper evidentiary basis,

then all of the contract measures go down with the ship, irrespective of

any narrow tailoring or substantial relationship analysis.

By stipulation, the plaintiffs' members are competing with MWBEs for

County construction contracts, and because of the MWBE programs they do

not compete on an equal basis. When the government loads the dice that

way, the Supreme Court says that anyone in the game has standing to raise

a constitutional challenge. “The injury in cases of this kind is that

a discriminatory classification prevent[s] the plaintiff from competing

on an equal footing.” Adarand Constructors, Inc. v. Pena, ___ U.S. ___,

___, 115 S. Ct. 2097, 2105 (1995) (alteration in original) (citation and

internal quotation marks omitted). "To establish standing, therefore,

a party challenging a set-aside program ... need only demonstrate that

it is able and ready to bid on contracts and that a discriminatory policy

prevents it from doing so on an equal basis." Northeastern Florida

Contractors v. City of Jacksonville, 508 U.S. ___, ___, 113 S. Ct. 2297,

17

2303 (1993). We are satisfied that the plaintiffs have standing to

challenge the constitutionality of the MWBE programs, and we turn now to

the merits of that challenge.

V. LEGAL STANDARDS FOR SCRUTINIZING AFFIRMATIVE ACTION PROGRAMS

A. RACIAL AND ETHNIC PREFERENCES

Because the BBE and HBE programs create preferences based on race

and ethnicity, the relevant constitutional standard applicable to those

programs is the strict scrutiny test articulated in City of Richmond v.

J.A. Croson Co., 488 U.S. 469, 109 S. Ct. 706 (1989). That test requires

a “searching judicial inquiry” into the justification for the preference,

because without that kind of close analysis “there is simply no way of

determining what classifications are 'benign' or 'remedial' and what

classifications are in fact motivated by illegitimate notions of racial

inferiority or simple racial politics.” Id. at 493, 109 S. Ct. at 721.

Accordingly, strict scrutiny is designed both to “'smoke out'

illegitimate uses of race by assuring that the legislative body is

pursuing a goal important enough to warrant use of a highly suspect tool”

and to “ensure[] that the means chosen 'fit' this compelling goal so

closely that there is little or no possibility that the motive for the

classification was illegitimate racial prejudice or stereotype.” Id.

Under strict scrutiny, an affirmative action program must be based

upon a "compelling governmental interest" and must be "narrowly tailored"

to achieve that interest. E.g., Ensley Branch, 31 F.3d at 1564

(citations omitted). As we have observed:

In practice, the interest that is alleged in support of

racial preferences is almost always the same -- remedying past

or present discrimination. That interest is widely accepted

as compelling. As a result, the true test of an affirmative

action program is usually not the nature of the government's

interest, but rather the adequacy of the evidence of

discrimination offered to show that interest.

18

Id. at 1565 (citations and internal quotation marks omitted).

If a race- or ethnicity-conscious affirmative action program is to

be upheld, "the district court must make a factual determination that

[there exists] a strong basis in evidence" to support the conclusion that

remedial action is necessary. Id. (citation and internal quotation marks

omitted); see also Croson, 488 U.S. at 500, 109 S. Ct. at 725 (plurality

opinion). As we explained in Ensley Branch, "[c]ertain aspects of this

inquiry are well established." 31 F.3d at 1565. A "strong basis in

evidence" cannot rest on "an amorphous claim of societal discrimination,

on simple legislative assurances of good intention, or on congressional

findings of discrimination in the national economy." Id. (citing and

applying Croson) (internal quotation marks omitted). However, a

governmental entity can “justify affirmative action by demonstrating

'gross statistical disparities' between the proportion of minorities

hired ... and the proportion of minorities willing and able to do the

work.” Id. (citations omitted). “Anecdotal evidence may also be used

to document discrimination, especially if buttressed by relevant

statistical evidence.” Id. (citation omitted). Accordingly, “if the

[County] could show that it had essentially become a 'passive

participant' in a system of racial exclusion practiced by elements of the

local construction industry,” the Supreme Court has made it “clear that

the [County] could take affirmative steps to dismantle such a system.”

Croson, 488 U.S. at 492, 109 S. Ct. at 721 (plurality opinion).

Here, the district court reviewed the evidence and made a factual

determination that the County lacked the requisite strong basis in

evidence to support the County's conclusion that race- and ethnicity-

conscious remedial action is necessary. 943 F. Supp. at 1584. As

previously explained, our role in re-reviewing that evidence is limited.

19

Our task is not to determine whether the district court's factfinding is

“correct” in the sense of ultimate truth. Instead, under the clearly

erroneous standard, our duty is to examine the record solely to determine

whether the district court's view of the evidence is a permissible one,

a plausible one in light of the entire record.

B. GENDER PREFERENCES

1. The Effect of the VMI Decision

At first blush, the relevant constitutional standard to be applied

to the WBE program is not entirely clear. Traditionally, gender-based

affirmative action programs have been governed by intermediate scrutiny,

meaning that “[t]o withstand constitutional challenge, ...

classifications by gender must serve important governmental objectives

and must be substantially related to achievement of those objectives.”

Craig v. Boren, 429 U.S. 190, 197, 97 S. Ct. 451, 456-57 (1976). That

has been the standard for two full decades, and the district court

applied it to this case. See 943 F. Supp. at 1556.

The district court was concerned, however, by the Supreme Court's

recent decision in United States v. Virginia, 116 S. Ct. 2264 (1996)

(invalidating the maintenance of single-sex education program at Virginia

Military Institute) (hereinafter “VMI”). In VMI, the Court held that

"[p]arties who seek to defend gender-based government action must

demonstrate an 'exceedingly persuasive justification' for that action."

Id. at 2274 (citations omitted). The phrase “exceedingly persuasive

justification” permeates the Court's VMI opinion, id. at 2271, 2274,

2276, 2282, 2287, and that phrase connotes more intense scrutiny than do

customary descriptions of intermediate scrutiny. See id. at 2294

(Scalia, J., dissenting) (suggesting that the majority had effectively

adopted a form of strict scrutiny for gender classifications).

20

Nevertheless, the VMI Court expressly disclaimed "equating gender

classifications, for all purposes, to classifications based on race or

national origin." Id. at 2275 (majority opinion).

The district court assumed without deciding that traditional

intermediate scrutiny still applies to gender-conscious affirmative

action programs. See 943 F. Supp. at 1556. Finding that the WBE program

lacked a sufficient evidentiary foundation to withstand traditional

intermediate level scrutiny, the district court found it unnecessary to

decide whether the VMI decision raised the constitutional hurdle over

which gender-conscious affirmative action programs must leap. See id.

We conclude that the district court was correct to apply intermediate

scrutiny to the WBE program.

First, although the phrase “exceedingly persuasive justification”

has more linguistic verve than conventional descriptions of intermediate

scrutiny, it does not necessarily follow that a new constitutional

standard for judging gender preferences is embodied in that phrase.

Concurring in VMI, Chief Justice Rehnquist suggested that the “phrase is

best confined, as it was first used, as an observation on the difficulty

of meeting the applicable test, not as a formulation of the test itself.”

VMI, 116 S. Ct. at 2288 (Rehnquist, C.J., concurring). Similarly,

Justice Scalia suggested that the answer to whether the justification for

a gender classification is “exceedingly persuasive” is properly derived

from considering whether the classification serves important governmental

objectives and is substantially related to their achievement. Id. at

2294 (Scalia, J., dissenting). That is an attractive resolution of the

issue -- especially in view of the fact that the majority opinion in VMI

recites the time-honored intermediate scrutiny standard with approval

even as it explains how a district court must evaluate whether the

21

proffered justification for a gender classification is “exceedingly

persuasive.” See id. at 2275 (majority opinion).

Moreover, a holding that the Supreme Court has abandoned traditional

intermediate scrutiny in favor of a more restrictive formulation would

mean that the Court has overruled sub silentio its long line of

precedents applying intermediate scrutiny to gender classifications. See

id. at 2288 (Rehnquist, C.J., concurring) (listing Supreme Court

precedents applying traditional intermediate scrutiny). Even if the VMI

case portends a major change in the Supreme Court's approach to gender

classifications, “we are not at liberty to disregard binding case law

that is so closely on point and has been only weakened, rather than

directly overruled, by the Supreme Court.” Florida League of Prof'l

Lobbyists v. Meggs, 87 F.3d 457, 462 (11th Cir. 1996). The Supreme Court

has cautioned us that “[i]f a precedent of this Court has direct

application in a case, yet appears to rest on reasons rejected in some

other line of decisions, the Court of Appeals should follow the case

which directly controls, leaving to this Court the prerogative of

overruling its own decisions.” Rodriguez de Quijas v. Shearson/American

Express, Inc., 490 U.S. 477, 484, 109 S. Ct. 1917, 1921-22 (1989); see

also Agostini v. Felton, ___ U.S. ___, ___, ___ S. Ct. ___, ___, (June

23, 1997) (reaffirming that holding of Rodriguez de Quijas). Of course,

we take that admonition seriously. See, e.g., Brisentine v. Stone &

Webster Eng'g Corp., ___ F.3d ___, ___ (No. 96-6866, 11th Cir. 1997);

Scala v. City of Winter Park, ___ F.3d ___, ___ n.2 (No. 96-3121, 11th

Cir. 1997).

There is a long line of directly applicable Supreme Court precedents

applying traditional intermediate scrutiny to gender classifications.

More specifically, the Supreme Court held in Mississippi University for

22

Women v. Hogan, 458 U.S. 718, 724, 102 S. Ct. 3331, 3335 (1982), that

intermediate scrutiny was the appropriate test to apply to a gender-based

classification favoring women, which is the same type of classification

created by the County's WBE program. Instead of overruling Mississippi

University for Women, the VMI Court cited that case as “immediately in

point” and the “closest guide” for the VMI decision itself. VMI, 116 S.

Ct. at 2275, 2271. The Supreme Court is not in the business of

overruling its own precedents by citing them with approval, and we

decline to hold that the Court did so in the VMI case. Unless and until

the Supreme Court tells us otherwise, intermediate scrutiny remains the

applicable constitutional standard in gender discrimination cases, and

a gender preference may be upheld so long as it is substantially related

to an important governmental objective.

2. The Requisite Evidentiary Showing

In attempting to satisfy the important governmental objective prong

of the intermediate scrutiny test, the County contends that the objective

of the WBE program is to “redress discrimination against women.” That

stated objective is typical, and it is unquestionably a sufficiently

“important” one to sustain a gender-conscious affirmative action program.

See Califano v. Webster, 430 U.S. 313, 318, 97 S. Ct. 1192, 1195 (1977)

(upholding affirmative action in the calculation of Social Security

retirement benefits where “[t]he challenged statute operated directly to

compensate women for past economic discrimination”); see also, e.g.,

Ensley Branch, 31 F.3d at 1580 (holding that “the government interest

prong of the inquiry can be satisfied by a showing of societal

discrimination in the relevant economic sector”). Therefore, as in the

racial analogue, “the true test of an affirmative action program is

usually not the nature of the government's interest, but rather the

23

adequacy of the evidence of discrimination offered to show that

interest.” Id. at 1565 (citation and internal quotation marks omitted).

Although it is clear that both gender-conscious and race- or

ethnicity-conscious programs must be tested for evidentiary sufficiency,

the measure of the evidence required is less clear in the gender context.

The Supreme Court has not addressed the question explicitly, and there

is a similar dearth of guidance in the reported decisions of other

federal appellate courts. As the Third Circuit has observed, “Few cases

have considered the evidentiary burden needed to satisfy intermediate

scrutiny in this context and there is no Croson analogue to provide a

ready reference point.” Contractors Ass'n v. City of Philadelphia, 6

F.3d 990, 1010 (3d Cir. 1993). The Supreme Court has told us plainly

that race- and ethnicity-conscious programs must be tested for a “strong

basis in evidence,” and a body of appellate jurisprudence has developed

to provide that label with meaningful content. See, e.g., Croson, 488

U.S. at 499-504, 109 S. Ct. at 724-27 (identifying factors that cannot

form a “strong basis in evidence”); Ensley Branch, 31 F.3d at 1565

(citing and applying Croson). In the gender context, however, we must

work without an analogous evidentiary label from the Supreme Court, and

the jurisprudence is less developed.

Regardless of what label might be affixed to the standard, it is

clear to us that a gender-conscious affirmative action program can rest

safely on something less than the “strong basis in evidence” required to

bear the weight of a race- or ethnicity-conscious program. We agree with

the Third Circuit that “[l]ogically, a [local government] must be able

to rely on less evidence in enacting a gender preference than a racial

preference because applying Croson's evidentiary standard to a gender

preference would eviscerate the difference between strict and

24

intermediate scrutiny.” Contractor's Ass'n, 6 F.3d at 1010; see also

Peter Lurie, Comment, The Law as They Found It: Disentangling Gender-

Based Affirmative Action Programs from Croson, 59 U. Chi. L. Rev. 1563,

1584-89 (1992) (concluding that “[t]he factual predicate required cannot

be equal to that needed to support a racial classification” because

“[a]ppending a Croson-style factual predicate to the standard

disingenuously transforms” intermediate scrutiny into strict scrutiny).

While there is a difference between the evidentiary foundation

necessary to support a race- or ethnicity-conscious affirmative action

program and the evidentiary foundation necessary to support a gender

preference, that difference is one of degree, not of kind. In both

circumstances, the test of the program is the adequacy of evidence of

discrimination, but in the gender context less evidence is required. The

difficulty, of course, is in determining how much less.

Thus far, the Third Circuit is the only federal appellate court that

has explicitly attempted to clarify the evidentiary requirement

applicable to gender-conscious programs. In Contractors Association, it

announced that the intermediate scrutiny standard “requires the

[government] to present probative evidence in support of its stated

rationale for the gender preference, discrimination against women-owned

contractors.” Contractors Ass'n, 6 F.3d at 1010 (emphasis added). After

announcing the “probative evidence” standard, the Contractors Association

court went on to hold that the evidence of discrimination against women

that the government had offered was “insufficient to create an issue of

fact.” Id. at 1011. It reached that conclusion even though the

government had offered some evidence of discrimination against women,

including a statistical study, an affidavit, and the testimony of a

witness who had appeared at a city council hearing. See id.

25

Plainly, the evidence offered by the government in Contractors

Association was “probative” as that word is commonly understood, because

it tended, at least to some extent, to prove discrimination against

women. See, e.g., Black's Law Dictionary 1203 (6th ed. 1990) (defining

“probative evidence” as evidence “tending to prove” or which “contributes

toward proof”). The probative evidence in Contractors Association was

nonetheless judged “insufficient.” We think that the court's holding in

Contractor's Association is more helpful than the “probative evidence”

standard the opinion articulates. Under the Third Circuit's holding,

evidence offered in support of a gender preference must not only be

“probative,” it must also be “sufficient.”

We agree with the Third Circuit's de facto requirement that a

proponent of a gender-conscious affirmative action program must present

not only probative evidence of discrimination, but sufficient probative

evidence of it. Of course, that formulation begs the question of when

the evidence becomes “sufficient,” but no more so than the Supreme

Court's requirement of a “strong basis in evidence” in the racial

analogue begs the question of when the evidence becomes “strong.” In

both contexts, the evidentiary standards necessarily are tautological

when the words alone are considered and must draw meaning from an

evolving body of case law that will define them. Although the difference

between the “strong basis in evidence” standard applicable to race- or

ethnicity-conscious programs and the less-stringent “sufficient probative

evidence” standard applicable to gender-conscious programs cannot be

measured or described with scientific precision, we have previously

recognized two principal guidelines that mark the boundaries of

intermediate scrutiny evidentiary analysis.

26

First, “[u]nder the intermediate scrutiny test, a local government

must demonstrate some past discrimination against women, but not

necessarily discrimination by the government itself.” Ensley Branch, 31

F.3d at 1580. Indeed, “[o]ne of the distinguishing features of

intermediate scrutiny is that, unlike strict scrutiny, the government

interest prong of the inquiry can be satisfied by a showing of societal

discrimination in the relevant economic sector.” Id. (citations

omitted). Thus, to be sufficient the evidence need not be about

governmental discrimination.

Second, the intermediate scrutiny evidentiary review is not to be

directed toward mandating that gender-conscious affirmative action is

used only as a “last resort,” Hayes v. North State Law Enforcement

Officers Ass'n, 10 F.3d 207, 217 (4th Cir. 1993) (racial discrimination

case), but instead to ensuring that the affirmative action program is “a

product of analysis rather than a stereotyped reaction based on habit,”

Contractors Ass'n, 6 F.3d at 1010 (quoting Metro Broadcasting, Inc. v.

FCC, 497 U.S. 547, 582-83, 110 S. Ct. 2997, 3018-19 (1990)).

Nevertheless, any “'analysis' that rests upon unsupported factual

premises cannot possibly be 'reasoned,' and an untrue and widely-held

generalization about men or women is by definition a 'stereotype.'”

Lamprecht v. FCC, 958 F.2d 382, 393 n.3 (D.C. Cir. 1992) (Thomas, Circuit

Justice). That is why the intermediate scrutiny evidentiary “inquiry

turns on whether there is evidence of past discrimination in the economic

sphere at which the affirmative action program is directed.” Ensley

Branch, 31 F.3d at 1581. Unsupported generalizations will not suffice.

Although sufficiency-of-the-evidence standards may elude precise

formulation, we believe the foregoing two guidelines will assist courts

in determining when a government has presented sufficient probative

27

evidence in support of its stated rationale for enacting a gender

preference, i.e., when the evidence is sufficient to show that the

preference rests on evidence-informed analysis rather than on

stereotypical generalizations. Under those guidelines, the government

must satisfy an “intermediate” standard -- less stringent than the

“strong basis in evidence” standard associated with strict scrutiny, yet

more demanding than merely any probative evidence. The Third Circuit's

actual holding in Contractors Association that the evidence there was

insufficient, a holding with which we agree, provides some guidance to

bench and bar. We hope our decision about whether the district court

clearly erred in finding that the specific evidentiary showing in this

case is insufficient will provide additional guidance. Future cases may

serve to clarify further the evidentiary standard applicable to gender-

conscious affirmative action programs, but for the time being we need

only decide whether the district court clearly erred in finding that Dade

County failed to meet its evidentiary burden in this case.

In this case, the district court reviewed the evidence that the

County offered in support of the WBE program, and it made a factual

determination that the evidence was “insufficient to provide the factual

predicate to support the County's state[d] rationale for its gender

preference program.” 943 F. Supp. at 1584. As with the racial and

ethnicity preference programs, we have a limited role to play in

evaluating that factfinding. We will not review the evidence to

determine whether we would have reached a different conclusion if we had

been sitting as the trier of fact. Instead, we will review the evidence

only to determine whether the district court's view of the evidence is

a permissible one, a plausible one in light of the entire record.

VI. THE EVIDENCE

28

The County put forward two types of evidence in support of its MWBE

programs: (1) statistical evidence and (2) nonstatistical or "anecdotal"

evidence. Because much of the statistical evidence is derived from

studies related to more than one MWBE program, we will review the

statistical evidence for all three of the programs simultaneously,

bearing in mind that a less stringent standard of review applies to the

WBE program. After reviewing the statistical evidence, we will review

the anecdotal evidence, which is focused almost exclusively on the BBE

program.

Before turning to the evidentiary details, however, we address an

issue that bears on much of the analysis that will follow. With respect

to the BBE program, most of the statistical evidence presented by the

County is “post-enactment” evidence, i.e. evidence based on data related

to years following the County's initial enactment of the BBE program in

1982. As we and a number of other circuits have held, the use of that

kind of evidence is permissible:

Although Croson requires that a public employer show strong

evidence of discrimination when defending an affirmative

action plan, the Supreme Court has never required that,

before implementing affirmative action, the employer must have

already proved that it has discriminated. On the contrary,

formal findings of discrimination need neither precede nor

accompany the adoption of affirmative action.

Ensley Branch, 31 F.3d at 1565; see also Concrete Works v. City & County

of Denver, 36 F.3d 1513, 1521 (10th Cir. 1994), cert. denied, 514 U.S.

1004, 115 S. Ct. 1315 (1995); Contractors Ass'n, 6 F.3d at 1003-04 (3d

Cir. 1993); Harrison & Burrowes Bridge Constructors, Inc. v. Cuomo, 981

F.2d 50, 60 (2d Cir. 1992); Coral Constr. Co. v. King County, 941 F.2d

910, 920 (9th Cir. 1991).

Without repeating everything we had to say in Ensley Branch on this

subject, it warrants emphasis that consideration of post-enactment

29

evidence is appropriate when affirmative action programs are scrutinized,

because “[a] violation of federal statutory or constitutional

requirements does not arise with the making of a finding; it arises when

the wrong is committed.” Wygant v. Jackson Bd. of Educ., 476 U.S. 267,

289, 106 S. Ct. 1842, 1855 (1986) (O'Connor, J., concurring). Therefore,

if the County can demonstrate that, notwithstanding its affirmative

action efforts, it remains a “'passive participant' in a system of racial

exclusion practiced by elements of the local construction industry,”

Croson, 488 U.S. at 492, 109 S. Ct. at 721 (plurality opinion), there is

no justification for invalidating the County's voluntary efforts to

dismantle that exclusionary system, at least to the extent that those

efforts are narrowly tailored to accomplishment of that goal. This is

particularly true in light of the fact that the relief granted to the

plaintiffs by the district court is a permanent injunction against the

continued operation of the MWBE programs. See Contractors Ass'n, 6 F.3d

at 1004 (observing that “[b]ecause injunctions are prospective only, it

makes sense to consider all available evidence ... including the post-

enactment evidence”).

Although post-enactment evidence is admissible to determine whether

an affirmative action program is constitutional, such evidence carries

with it the hazard that the program at issue may itself be masking

discrimination that might otherwise be occurring in the relevant market.

In view of that hazard, the County contends that the district court erred

when it “failed to consider that the 12 year pre-existing BBE program

caused the foregoing [statistical] measures of participation to

understate disparity for Black participation.” On that point, the County

is mistaken, because the district court did consider that possibility.

30

In fact, the district court observed that the County's use of post-

enactment evidence was “skewed by the challenged affirmative action

program,” 943 F. Supp. at 1558, even though the court nevertheless

considered in detail the post-enactment evidence that the County itself

chose to present. What the district court did not do is speculate about

what the data might have shown had the BBE program never been enacted.

We find no fault in that approach, because a strong basis in evidence can

never arise from sheer speculation. Government actors are free to

introduce post-enactment evidence in defending affirmative action

programs, but if that evidence fails to meet the applicable evidentiary

burden, a federal court cannot simply presume that, absent the programs,

sufficient evidence of discrimination would have been found. Like the

district court, we take the County's evidence as we find it, or rather

as the County presented it.

A. THE STATISTICAL EVIDENCE

The County presented five basic categories of statistical evidence

to the district court: (1) County contracting statistics; (2) County

subcontracting statistics; (3) marketplace data statistics; (4) The

Wainwright Study; and (5) The Brimmer Study. Below, we describe and

summarize each of those categories of statistical evidence in turn.

1. County Contracting Statistics

The heart of the County's statistical analysis is a study that

2

compares the following three factors for County nonprocurement

2

When Dade County engages with the private sector in business

activities, the County classifies those activities as “procurement”

or “nonprocurement.” In general, nonprocurement business

activities

include construction, personal and professional services, leases,

and concessions. Approximately 90% of the County's overall

31

construction contracts: (1) the percentage of bidders that were MWBE

firms; (2) the percentage of awardees that were MWBE firms; and (3)

the proportion of County contract dollars that have been awarded to

MWBE firms. The study makes those comparisons for two time

periods: 1989-91 and 1993. Fiscal year 1992 was not included in

the study, because of the extraordinary expenditures associated

with Hurricane Andrew. The statistics for the years that were

included may be summarized as follows:

construction expenditures fall are classified as nonprocurement,

which understandably prompted the County to focus its statistical

presentation on nonprocurement construction contracting data. The

County's expert, Dr. Manuel Carvajal, testified that the

nonprocurement construction contracting statistics were the most

probative statistical evidence of discrimination that the County

had.

32

BBE: 1989-91

Category BBE Bidders (%) BBE Awardees (%) Contract $ (%)

SIC 15 13.8 15.0 1.8

SIC 16 5.2 3.4 0.5

SIC 17 16.2 13.5 4.8

BBE: 1993

Category BBE Bidders (%) BBE Awardees (%) Contract $ (%)

SIC 15 17.5 24.6 7.8

SIC 16 16.6 24.1 9.9

SIC 17 21.3 20.0 14.0

Defendants' Exhibit L.

HBE: 1989-91

Category HBE Bidders (%) HBE Awardees (%) Contract $ (%)

SIC 15 31.0 33.0 15.0

SIC 16 23.2 21.9 14.2

SIC 17 28.6 31.1 7.2

HBE: 1993

Category HBE Bidders (%) HBE Awardees (%) Contract $ (%)

SIC 15 31.7 33.9 24.4

SIC 16 22.5 26.5 18.2

SIC 17 29.5 30.0 32.7

Defendants' Exhibit M.

WBE: 1989-91

Category WBE Bidders (%) WBE Awardees (%) Contract $ (%)

33

SIC 15 6.9 6.0 1.0

SIC 16 3.2 2.2 2.9

SIC 17 13.3 13.5 4.4

WBE: 1993

Category WBE Bidders (%) WBE Awardees (%) Contract $ (%)

SIC 15 13.5 6.1 0.9

SIC 16 9.2 5.7 5.3

SIC 17 9.8 15.0 25.4

Defendants' Exhibit N.

At least one thing is fairly obvious from the foregoing

statistics. For the BBE and HBE statistics, there are no

consistently negative disparities between the bidder and the

awardee percentages. In fact, by 1993, the BBE and HBE bidders are

being awarded more than their proportionate "share" of the total

number of County contracts in every SIC category, when the bidder

percentages are used as the baseline for predicting those shares.

There are a couple exceptions to that observation, but in general

it is true. Therefore, as an initial matter, we certainly cannot

conclude that the district court clearly erred by failing to find

a strong basis in evidence of discrimination against BBEs and HBEs

from disparities between bidder and awardee percentages.

For WBEs, the bidder/awardee results are decidedly mixed. For

SIC 17, WBEs consistently have been awarded more than their

proportionate share of County contracts. For SIC 15 and SIC 16 in

years 1989-91, the difference between the WBE bidder and awardee

34

percentages is small, but disfavorable to the WBEs. For those same

categories in 1993, however, the difference between WBE bidders and

awardees is more disfavorable to WBEs -- at the same time the

favorable disparity in SIC 17 has also increased. Without further

analytical refinement, we cannot say that the district court

clearly erred by failing to find in the mixed picture presented by

the WBE bidder/awardee disparities a sufficiently probative basis

in the evidence of discrimination in the relevant economic sector

to justify the County's use of a gender preference.

The County's study refined the foregoing statistical analysis

by bringing into the mix the percentage of County construction

contract dollars actually being awarded to MWBEs. To do that, the

study calculated "disparity indices" for each program and SIC code.

In colloquial terms, a disparity index compares the amount of

contract awards a group actually got to the amount we would have

expected it to get based on that group's bidding activity and

awardee success rate. More specifically, a disparity index

measures the participation of a group in County contracting dollars

by dividing that group's contract dollar percentage by the related

bidder or awardee percentage, and multiplying that result by 100%.

The closer the resulting index is to 100%, the greater the measured

group's participation in the contracting dollars. For instance, if

the BBEs represented 10% of bidders, and were awarded 10% of

contract dollars, the bidder disparity index would be:

(Contract Dollar % ÷ Bidder % ) x 100 %=

(10% ÷ 10%) x 100%=

35

1 x 100% = 100% or "full participation"

Similarly, if the BBEs represented 10% of awardees, but were

awarded only 5% of contract dollars, the awardee disparity index

would be:

(Contract Dollar % ÷ Awardee % ) x 100 %=

(5% ÷ 10%) x 100%=

.5 x 100% = 50% or "half participation"

The utility of disparity indices or similar measures to

examine the utilization of minorities or women in a particular

industry has been recognized by a number of federal circuit courts.

See Concrete Works, 36 F.3d at 1523 n.10 (10th Cir. 1994)

(employing disparity index); Contractors Ass'n, 6 F.3d at 1005 (3d

Cir. 1993) (employing disparity index); Associated Gen. Contractors

v. Coalition for Economic Equity, 950 F.2d 1401, 1414 (9th Cir.

1991) (employing similar statistical data); see also Stuart v.

Roache, 951 F.2d 446, 451 (1st Cir. 1991) (employing similar

statistical data); Cone Corp v. Hillsborough County, 908 F.2d 908,

915-16 (11th Cir. 1990) (employing similar statistical data).

In general, and as the district court recognized, disparity

indices of 80% or greater, which are close to full participation,

are not considered indications of discrimination. For instance,

the EEOC's disparate impact guidelines use the 80% test as the

boundary line for determining a prima facie case of discrimination.

29 C.F.R. § 1607.4D. Additionally, none of the circuits that have

explicitly endorsed the use of disparity indices have indicated

that an index of 80% or greater might be probative of

36

discrimination. See Concrete Works, 36 F.3d at 1524 (10th Cir.

1994) (crediting disparity indices ranging from 0% to 3.8%);

Contractors Ass'n, 6 F.3d at 1005 (3d Cir. 1993) (crediting

disparity index of 4%). The district court did not consider

disparity indices of 80% or greater to be probative of

discrimination. In light of the foregoing authority, including the

EEOC's guidance on the subject, we cannot say that view of the

evidence was clearly erroneous.

After calculation of the disparity indices, the County's study

tested the statistical significance of the results through the

application of standard deviation analysis. The standard deviation

figure describes the probability that the measured disparity is the

result of mere chance. As we previously have recognized:

Social scientists consider a finding of two standard

deviations significant, meaning there is about one chance

in 20 that the explanation for the deviation could be

random and the deviation must be accounted for by some

factor other than chance.

Peightal v. Metropolitan Dade County, 26 F.3d 1545, 1556 n.16 (11th

Cir. 1994) (quoting Waisome v. Port Authority, 948 F.2d 1370, 1376

(2d Cir. 1991)).

The disparity indices for the County's contracting statistics,

together with their corresponding standard deviation values, 3 are

as follows:

BBE: 1989-91

3

Disparity indices that the County's expert identified as

having no statistical significance are indicated by the inclusion

of a dash in the corresponding “Standard Deviation Value” column.

37

Bidder Standard Awardee Standard

Disparity Deviation Disparity Deviation

Category Index Value Index Value

SIC 15 12.6% 3.26 11.6% 3.39

SIC 16 10.1% 2.61 15.5% 1.94

SIC 17 29.7% 2.35 35.6% 1.84

BBE: 1993

Bidder Standard Awardee Standard

Disparity Deviation Disparity Deviation

Category Index Value Index Value

SIC 15 44.9% 1.81 31.9% 2.59

SIC 16 59.3% 1.40 40.9% 2.50

SIC 17 65.6% -- 69.9% --

Defendants' Exhibit L.

HBE: 1989-91

Bidder Standard Awardee Standard

Disparity Deviation Disparity Deviation

Category Index Value Index Value

SIC 15 48.4% 2.86 45.5% 2.98

SIC 16 61.2% 2.12 64.9% 1.89

SIC 17 25.3% 3.53 23.2% 3.69

HBE: 1993

38

Bidder Standard Awardee Standard

Disparity Deviation Disparity Deviation

Category Index Value Index Value

SIC 15 76.9% 1.06 72.1% 1.19

SIC 16 80.8% -- 68.8% 1.31

SIC 17 110.9% -- 109.1% --

Defendants' Exhibit M.

WBE: 1989-91

Bidder Standard Awardee Standard

Disparity Deviation Disparity Deviation

Category Index Value Index Value

SIC 15 14.6% 2.19 16.8% 1.92

SIC 16 89.8% -- 128.9% --

SIC 17 33.2% 1.99 32.7% 1.94

WBE: 1993

Bidder Standard Awardee Standard

Disparity Deviation Disparity Deviation

Category Index Value Index Value

SIC 15 6.3% 2.87 13.8% 1.64

SIC 16 57.3% 1.05 91.4% --

SIC 17 257.8% -- 169.1% --

Defendants' Exhibit N.

In the absence of further refinement, the foregoing statistics

would indicate statistically significant underutilization of BBEs

in County construction contracting. With the exception of SIC 17

for 1993, there are substantial and statistically significant

39

unfavorable disparities for County contract dollars -- in terms of

bidder participation, awardee participation, or both. For SIC 17

in 1993, there is a substantial unfavorable disparity with respect

to both bidder and awardee participation, but neither figure is

statistically significant.

With HBEs, the results are less dramatic. For 1989-91, there

are substantial and statistically significant unfavorable

disparities for County contract dollars in all three SIC

categories. However, by 1993, there are no statistically

significant unfavorable disparities, and in SIC 17 the disparity

(albeit statistically insignificant) is favorable toward Hispanics.

For WBEs, the picture is mixed. For 1989-91, there is a

substantial and statistically significant unfavorable disparity

only in SIC 15. However, with standard deviation values of 1.9 for

both bidder and awardee participation, the substantial unfavorable

disparity in SIC 17 very closely approaches statistical

significance. On the other hand, the disparities for SIC 16 in

1989-91 during the same time frame are favorable to WBEs. Turning

to 1993, the only category with a statistically significant

unfavorable disparity is SIC 15. For SIC 16, the disparity for

awardee participation is insubstantial, and for bidder

participation is substantial but statistically insignificant. For

SIC 17, the disparities (though statistically insignificant) are

favorable toward WBEs.

As this circuit and others have recognized, when the proponent

of an affirmative action plan produces sufficient evidence to

40

support an inference of discrimination, the plaintiff must rebut

that inference in order to prevail. See Concrete Works, 36 F.3d at

1522 (10th Cir. 1994); Contractors Ass'n, 6 F.3d at 1006 (3d Cir.

1993); Howard v. McLucas, 871 F.2d 1000, 1007 (11th Cir. 1989). As

we explained in Howard, which involved public employment, once the

proponent of affirmative action:

introduces its statistical proof as evidence of its

remedial purpose, thereby supplying the [district] court

with the means for determining that [it] had a firm basis

for concluding that remedial action was appropriate, it

is incumbent upon the nonminority [employees] to prove

their case; they continue to bear the ultimate burden of

persuading the [district] court that the [public

employer's] evidence did not support an inference of

prior discrimination and thus a remedial purpose, or

that the plan instituted on the basis of this evidence

was not sufficiently "narrowly tailored."

Id. at 1007 (quoting Wygant v. Jackson Bd. of Educ., 476 U.S. 267,

293, 106 S. Ct. 1842, 1856 (O'Connor, J., concurring in part and

concurring in the judgment)).

Typically, when statistical evidence is sufficient to support

an inference of discrimination, plaintiffs have at their disposal

at least three methods of rebutting that inference with a “neutral

explanation.” Contractors Ass'n, 6 F.3d at 1007. Plaintiffs may

do so by: “(1) showing that the statistics are flawed; (2)

demonstrating that the disparities shown by the statistics are not

significant or actionable; or (3) presenting contrasting

statistical data.” Coral Constr. , 941 F.2d at 921 (citation

omitted); Contractors Ass'n, 6 F.3d at 1007 (listing same methods).

We need not decide whether the foregoing statistical analysis was

sufficient to support an inference of discrimination such that the

41

plaintiffs were required to rebut that inference, because the

plaintiffs did produce sufficient evidence to establish a neutral

explanation for the disparities, whether they were required to or

not.

The plaintiffs have contended throughout this litigation that

the disparities illustrated by the County's statistical analysis,

which we have set out, are better explained by firm size than by

discrimination. The plaintiffs point out that minority and female-

owned firms tend to be smaller, and that it stands to reason

smaller firms will win smaller contracts. The plaintiffs produced

evidence based on 1987 Census data, which indicates that, on

average, minority and female-owned construction firms in Dade

County compare to non-MWBE firms as follows:

Category Employees Payroll Sales

Black 3.1 $45,238 $162,867

Hispanic 4.3 $70,893 $427,032

Women 6.6 $113,761 $632,500

Non-MWBE 14.1 $272,839 $1,268,29

1

Plaintiffs' Exhibit 54 at 39.

The plaintiffs' explanation for the disparities in County

contract dollar awards is a plausible one, in light of the

uncontroverted evidence that MWBE construction firms tend to be

substantially smaller than non-MWBE firms. Of course, it is hardly

surprising that MWBE firms bidding on or performing County

contracts are smaller than non-MWBE firms, because the County

42

requires them to be small in order to be counted as MWBE firms.

The Dade County Code requires that, absent a special exemption,

firms participating in the MWBE programs may not exceed the size

limits for “small business concerns” as defined by the Small

Business Administration. See Metropolitan Dade County Code § 2-

3.2(3). Thus, the relative smallness of the MWBE firms is a matter

of definition imposed by the County on the programs. Moreover, as

the County's own expert, Dr. Manuel Carvajal admitted, firm size

plays a significant role in determining which firms win contracts.

According to Dr. Carvajal:

The size of the firm has got to be a major determinant

because of course some firms are going to be larger, are

going to be better prepared, are going to be in a greater

natural capacity to be able to work on some of the

contracts while others simply by virtue of their small

size simply would not be able to do it.

More simply put: Because they are bigger, bigger firms have a

bigger chance to win bigger contracts. It follows that, all other

factors being equal and in a perfectly nondiscriminatory market,

one would expect the bigger (on average) non-MWBE firms to get a

disproportionately higher percentage of total construction dollars

awarded than the smaller MWBE firms. The County's own expert

admitted as much.

Anticipating the plaintiffs' neutral explanation for the

identified contract dollar disparities, the County's study

conducted regression analyses to control for firm size. As

explained in greater detail in the district court's opinion,

regression analysis is a statistical procedure for determining the

relationship between a dependent and independent variable, e.g.,

43

the dollar value of a contract award and firm size. See 943 F.

Supp. at 1564-65. The point of a regression analysis is to

determine whether the relationship between the two variables is

statistically meaningful. Here, the County's regression analyses

were directed toward identifying those disparities that were

unexplained by firm size, the theory being that those unexplained

disparities are necessarily the result of some other factor, such

as discrimination. The statistical significance of the calculated

results is once again expressed by standard deviation analysis.

The district court did not consider unexplained disparities that

corresponded to standard deviation values of less than two to be

probative of discrimination, and based on our Peightel decision,

that view of the evidence is not clearly erroneous. See Peightel,

26 F.3d at 1556 n.16 (recognizing that relationships corresponding

to a standard deviation of two or more are generally considered

significant).

The County's regression analyses were conducted twice, using

two different proxies for firm size: (1) total awarded value of all

contracts bid on; and (2) largest single contract awarded. The

regression analyses “explained” most of the unfavorable disparities

respecting MWBE participation in County contracting expenditures,

meaning that after the analysis was performed, most of the

unfavorable disparities became statistically insignificant, i.e.,

corresponded to standard deviation values of less than two. The

results of the regression analyses can be summarized as follows:

44

C The BBE regression analyses for firm size, based on total

value of all contracts bid on, served to explain all the

disparities except SIC 15 for 1989-91, and explained all

the disparities for 1993.

C The BBE regression analysis for firm size, based on the

largest contract awarded, served to explain all the

disparities except SIC 15 for 1989-91, and explained all

the disparities for 1993.

Defendants' Exhibit L.

C The HBE regression analyses for firm size, based on total

value of all contracts bid on, served to explain all the

disparities except SIC 17 for 1989-91, and all the

unfavorable disparities in 1993.

C The HBE regression analyses for firm size, based on the

largest contract awarded, failed to explain the

disparities for SIC 15 and SIC 17 for 1989-91. However,

for 1993, the regression explained all the unfavorable

disparities.

Defendants' Exhibit M.

C The WBE regression analyses for firm size, based on total

value of all contracts bid on, explained all the

unfavorable disparities for 1989-91. For 1993, the

regression explained all the disparities except for SIC

15.

C The WBE regression analyses for firm size, based on the

largest contract awarded, explained all of the

45

unfavorable disparities for 1989-91, and all the

disparities except for SIC 15 for 1993.

Defendants' Exhibit N.

Based on the foregoing, the district court concluded that the

demonstrated disparities were better explained by firm size than by

discrimination. In the district court's view, the few unexplained

disparities that remained after regressing for firm size did not

provide a strong basis in evidence of discrimination for BBEs and

HBEs, and did not sufficiently demonstrate the existence of

discrimination against WBEs in the relevant economic sector. We do

not consider that view of the evidence to be an implausible one in

light of the entire record, which is to say we do not find it to be

clearly erroneous.

Turning first to the BBE statistics, the firm-size regression

analyses explained all but one of the negative disparities in the

BBE study. The only unexplained negative disparity remaining after

regressing for firm size was the disparity for SIC 15 for 1989-91.

However, even the disparity for SIC 15 was explained by the 1993

regressions for firm size. The district court did not view an

unfavorable disparity for a single SIC code during 1989-91 to form

a strong basis in evidence for implementing a racial preference,

particularly when even that one unfavorable disparity was explained

by the firm-size regressions for 1993. The district court's view

does not leave us “with the definite and firm conviction that a

mistake has been committed.” United States v. United States Gypsum

Co., 333 U.S. 364, 395, 68 S. Ct. 525, 542 (1948).

46

Regarding the HBE statistics, both of the regression methods

failed to explain the unfavorable disparity in 1989-91 for SIC 17,

and one of the methods failed to explain the unfavorable disparity

for SIC 15 during the same time period. However, in 1993, both

regression methods explained all the unfavorable disparities.

Moreover, as illustrated by the foregoing tables, the 1993

disparities for SIC 17 were favorable to HBEs. The district court

did not consider those results to constitute a strong basis in

evidence of discrimination against HBE contractors, and we cannot

conclude that the district court's evaluation of the evidence is

clearly erroneous.

Finally, turning to the WBE statistics, the only unfavorable

disparity left unexplained by the firm-size regression analyses was

the 1993 disparity for SIC 15. All of the other unfavorable

disparities were explained by the firm-size regressions, and as

illustrated by the foregoing tables, the 1993 disparities for SIC

17 were favorable to WBEs. The district court did not consider

one unexplained disparity for a single SIC code in a single year to

be sufficiently probative of discrimination to support the County's

stated rationale for implementing a gender preference. Even

bearing in mind that the County's evidentiary burden is lower for

the WBE program than for the BBE or HBE programs, we believe the

district court's view of the evidence is a permissible one.

The County contends that the district court's evaluation of

the foregoing evidence was flawed, because the district court

focused its attention on the disaggregated data -- that is, data

47

broken down by SIC code. Even though the County's expert, Dr.

Carvajal, indicated that there were valid reasons for

disaggregating the data by SIC code “insofar as they reflect

different kinds of work, different bidding practices, perhaps a

variety of other factors that could make them heterogenous with one

another,” the County maintains that the district court should have

given more weight to the statistics that were consolidated for all

three SIC codes. According to the County, the district court's

approach caused it to disregard substantial and statistically

significant unfavorable disparities that exist in the aggregate for

BBEs, even after regressing for firm size. [County Br. at 21-26]

Notably, the County makes no parallel argument for the HBE and WBE

statistics, the apparent reason being that the aggregated data for

those programs yielded no statistically significant unfavorable

disparities after regressing for firm size.

The implicit reasoning underlying the County's aggregated data

argument seems to be that the district court erred by holding, in

effect, that aggregated data cannot form a strong basis in evidence

to support a racial preference. However, that is not what the

district court did. Instead, the district court declined to assign

dispositive weight to the BBE aggregated data for 1989-91 when: (1)

the BBE aggregated data for 1993 showed no statistically

significant unfavorable disparities after regressing for firm size;

(2) the BBE disaggregated data left only the disparity for SIC 15

in 1989-91 unexplained after the firm-size regressions were

applied; and (3) the County's own expert testified as to the

48

utility of examining the disaggregated data “insofar as they

reflect different kinds of work, different bidding practices,

perhaps a variety of other factors that could make them

heterogenous with one another.”4

Under those circumstances, we cannot conclude that the

district court clearly erred in assigning less weight to the

aggregated data when it decided whether the County had a strong

basis in evidence for implementing a racial preference. Even if we

were convinced that we would have weighed the evidence differently,

had we been sitting as the trier of fact, that alone is not a basis

for concluding that the district court's account of the evidence is

implausible. See Anderson, 470 U.S. at 573-74, 105 S. Ct. at 1511.

We conclude that the district court did not clearly err in finding

that a strong basis in evidence of discrimination against BBEs was

not shown by the 1989-91 aggregated data. Similarly, we conclude

that the district court did not clearly err in finding that the

evidentiary foundation formed by the disaggregated County

contracting statistics was too weak to support the weight of any of

the MWBE programs in view of the constitutional requirements

applicable to them. We turn now to the second category of

statistical evidence that the County presented to the district

court.

4

As noted by the district court, the aggregation of disparity

statistics for nonheterogenous data populations can give rise to a

statistical phenomenon known as “Simpson's Paradox,” which leads to

illusory disparities in improperly aggregated data that disappear

when the data are disaggregated. See 943 F. Supp. at 1560 n.16;

see also Plaintiffs' Exhibit 55 at 3-6 (discussing and illustrating

Simpson's Paradox).

49

2. County Subcontracting Statistics

The County performed a subcontracting study as part of its

statistical case. The object of the subcontracting study was to

measure the participation of each MWBE group in the County's

subcontracting business. For each MWBE category, the study

compared the proportion of the designated group that filed a

subcontractor's release of lien on a County construction project

between 1991 and 1994 with the proportion of sales and receipts

dollars that the same group received during the same time period.

For example, between 1991 and 1994, 11.5% of all firms that

filed a subcontractor's release of lien for SIC 17 County

construction projects were BBEs, while the sales and receipts of

those BBEs comprised only 6.3% of the total sales and receipts

claimed by all firms that filed a subcontractor's release of lien

with the County. According to the study's calculations, this leads

to a disparity index of 54.9%,5 which corresponds to a standard

deviation value of 1.37 (not statistically significant). Although

the disparity index in this example is not statistically

significant, some of the indices for some of the MWBE groups and

SIC codes were. Nevertheless, the district court found the

County's subcontracting study “insufficiently probative to support

the use of race and ethnicity conscious measures,” 943 F. Supp. at

1567, and an inadequate evidentiary foundation for use of a gender

preference, id. at 1572.

(6.3% ÷ 11.5%) x 100% = 54.8% . 54.9% (difference apparently

5

due to rounding in the study's calculations).

50

As noted, the objective of the subcontracting study was to

estimate the participation of each MWBE group in the County's

subcontracting business. However, the district court pointed out

serious methodological problems with the study's approach to

achieving that objective. Most notably, the denominator used in

the calculation of the MWBE sales and receipts percentages is based

upon the total sales and receipts from all sources for the firm

filing a subcontractor's release of lien with the County. That

means, for instance, that if a nationwide non-MWBE construction

company performing 99% of its business outside of Dade County filed

a single subcontractor's release of lien with the County during the

relevant time frame, all of its sales and receipts for that time

frame would be counted in the denominator against which MWBE sales

and receipts are compared. As the district court pointed out, see

943 F. Supp. at 1567, that is not a reasonable way to measure Dade

County subcontracting participation.

The County responds to the foregoing criticism by pointing out

that a strong majority (72%) of the subcontractors included in the

study are "located in" Dade County. We do not believe the district

court was required to view that as a satisfactory resolution of the

identified methodological problem. Twenty-eight percent of the

subcontractors included in the study are not “located in” Dade

County. Even as to the seventy-two percent, the County did not put

on evidence sufficient to prove that the nominal "location" of a

subcontractor serves as an acceptable proxy for that

subcontractor's source of revenue. We conclude that the district

51

court did not clearly err by declining to credit the County's

subcontracting statistics because “the data underlying the

defendants' subcontracting analysis are inappropriate,” 943 F.

Supp. at 1567. We turn now to the third category of statistical

evidence that the County presented to the district court.

3. Marketplace Data Statistics

The County's statistical case included a study that its

expert, Dr. Carvajal, described as designed “to see what the

differences are in the marketplace and what the relationships are

in the marketplace.” That study was based on a sample of 586

contractors that had filed a “certificate of competency” with Dade

County as of January 1995, drawn from a population of 10,462 firms

that had filed such a certificate. For the selected firms, a

telephone survey was conducted. That survey inquired about the

race, ethnicity, and gender of the firm's owner and asked for

information on the firm's total sales and receipts from all sources

(both public and private, within Dade County and without).

After the results of the telephone interviews were compiled,

Dr. Carvajal examined the data to determine whether meaningful

relationships existed between (1) the race, ethnicity, and gender

of the surveyed firm owners, and (2) the reported sales and

receipts of those firms. His hypothesis, of course, is that

“marketplace” discrimination may be responsible for unfavorable

disparities that exist when the sales and receipts of MWBE firms

are compared to those of non-MWBE firms. Dr. Carvajal performed a

regression analysis on the data, which was designed to filter out

52

the portion of identified disparities that may be attributable to

firm size, using the number of employees as a proxy for size.

Before discussing the results of the marketplace study, it

bears emphasis that the study's statistical universe is larger than

the number of firms that are willing, able, or qualified to perform

work on County construction contracts. Filing a “certificate of

competency” with the County means simply that a firm is a licensed

construction contractor, nothing more. Therefore, the parameters

of the study's statistical universe necessarily includes firms that

are unwilling, unable, or unqualified to perform County

construction contracts. We do not view that weakness in the

methodology as rendering the marketplace study meaningless,

particularly in the gender context where “the government interest

prong of the inquiry can be satisfied by a showing of societal

discrimination in the relevant economic sector,” Ensley Branch, 31

F.3d at 1580 (citations omitted). Indeed, we appreciate the

difficulty that would accompany an effort to identify the

statistical pool of contractors willing, able, and qualified to

perform on County contracts. Nevertheless, we believe this problem

is a factor that the district court was permitted to take into

account when evaluating the weight of the statistical results,

particularly insofar as the race- and ethnicity-conscious programs

are concerned. As the Supreme Court has recognized, “[w]hen

special qualifications are required to fill particular jobs,

comparisons to the general population (rather than to the smaller

group of individuals who possess the necessary qualifications) may

53

have little probative value.” Croson, 488 U.S. at 501, 109 S. Ct.

at 726 (quoting Hazelwood Sch. Dist. v. United States, 433 U.S.

299, 308 n.13, 97 S. Ct. 2736, 2742 n.13 (1977)).

Turning now to the results of the marketplace analysis, we

need not dwell long on the data for BBEs or WBEs. After regressing

for firm size, neither the BBE nor WBE data contained any

statistically significant unfavorable disparities -- either in the

aggregate or broken down by SIC code. Therefore, we cannot hold

that the district court clearly erred in finding that the

marketplace data survey was not probative of discrimination against

BBEs or WBEs.

By contrast, the marketplace data for HBEs revealed

unfavorable disparities in SIC 15, SIC 17, and in the aggregate,

that were statistically significant even after the firm-size

regressions were conducted. We think the district court was

certainly permitted to consider those unexplained disparities as

some evidence of discrimination against HBEs in the marketplace.

However, the district court was not required to assign those

disparities controlling weight in its evaluation of whether, in

view of all the evidence, the County had a strong basis in evidence

for implementing an ethnic preference for Hispanics. As previously

explained, the study's statistical pool is not limited to “the

number of minorities qualified to undertake the particular task.”

Croson, 488 U.S. at 502, 109 S. Ct. at 726. Moreover, we believe

the district court was well within permissible bounds in viewing

the marketplace data results as undermined by the dissimilar

54

results of the previously-discussed County contracting statistics.

See supra Part VI.A.1. We turn now to the fourth category of

statistical evidence that the County presented.

4. The Wainwright Study

At trial, the County introduced a statistical analysis

prepared by Mr. Jon Wainwright. The Wainwright study analyzed the

personal and financial characteristics of self-employed persons

working full-time in the Dade County construction industry, based

on data drawn from the 1990 Public Use Microdata Sample database,

which is derived from the decennial census. More specifically, the

study: (1) compared construction business ownership rates of MWBEs

to those of non-MWBEs and (2) analyzed disparities in personal

income between MWBE and non-MWBE business owners. The study

concluded that blacks, Hispanics, and women are less likely to own

construction businesses than similarly situated white males, and

MWBEs that do enter the construction business earn less money than

similarly situated white males. We will consider each of those

conclusions in turn.

The business ownership analysis of the Wainwright study

attempted to discern whether blacks, Hispanics, and women enter the

construction business at lower rates than similarly situated white

males. In determining whether persons were “similarly situated,”

the study considered “human capital” variables such as years of

education, years of labor market experience, marital status, and

English proficiency. Also considered were “financial capital”

variables such as interest and dividend income, and home ownership.

55

The analysis indicates that blacks, Hispanics, and women enter the

construction business at rates lower than would be expected if the

numerosity of those groups, together with the identified human and

financial capital variables, were the only factors affecting entry

into the construction business. For blacks and women (but not

Hispanics), the identified disparities are substantial and

statistically significant.

The theory underlying the business ownership component of the

Wainwright study is that any significant disparities that exist

after accounting for the identified human and financial capital

variables must be due to the ongoing effects of current and past

discrimination. In light of Croson, the district court was

certainly not required to accept that theory. In Croson, the local

government took a similar approach when it sought to carry its

evidentiary burden by relying on evidence that minority membership

in local contractors' associations was too low. The Supreme Court

rejected that attempt, reasoning as follows:

There are numerous explanations for this dearth of

minority participation, including past societal

discrimination in education and economic opportunities as

well as both black and white career and entrepreneurial

choices. Blacks may be disproportionately attracted to

industries other than construction. See The State of

Small Business: a Report of the President 201 (1986)

(“Relative to the distribution of all business, black-

owned businesses are more than proportionately

represented in the transportation industry, but

considerably less than proportionately represented in the

wholesale trade, manufacturing, and finance industries”).

...

For low minority membership in these associations to

be relevant, the city would have to link it to the number

of MBE's eligible for membership.

56

488 U.S. at 503, 109 S. Ct. at 727 (emphasis added).

In a pluralistic and diverse society, it is unreasonable to

assume that equality of opportunity will inevitably lead different

groups with similar human and financial capital characteristics to

make similar career choices. See Local 28 of Sheet Metal Workers

Int'l Ass'n v. EEOC, 478 U.S. 421, 494, 106 S. Ct. 3019, 3059

(1986) (O'Connor, J., concurring in part and dissenting in part)

("[I]t is completely unrealistic to assume that individuals of each

race will gravitate with mathematical exactitude to each employer

or union absent unlawful discrimination."). “Similarly situated”

women, men, blacks, whites, Native Americans, Italian-Americans,

and every other group that might be listed all bring their own

values and traditions to the socio-economic table, and may

reasonably be expected to make voluntary choices that give effect

to those values and traditions. As the Supreme Court recognized in

Croson, the disproportionate attraction of a minority group to non-

construction industries does not mean that discrimination in the

construction industry is the reason. See 488 U.S. at 503, 109 S.

Ct. at 727.

Moreover, the district court had before it other evidence

tending to show that disparities in construction business ownership

are not attributable to discriminatory barriers to entry. At

trial, there was evidence that between 1982 and 1987, the growth

rate of MWBE firms was considerably more robust than that of non-

MWBE firms. That data showed the following:

57

Ownership Growth Rate in Number of Firms

1982-87

Black 250%

Hispanic 289%

Women 121%

non-MWBE -26%

Plaintiffs' Exhibit 54 at 39. If the construction market itself

were discriminatory, it is difficult to understand how the 1982-87

growth rate of MWBE firms in that market accelerated so much

compared to that of non-MWBE firms. The answer, at least for

Hispanics and women, cannot be the Dade County MWBE programs,

because the HBE and WBE programs were not enacted until 1994. For

all of the foregoing reasons, we cannot conclude that the district

court clearly erred in assigning little or no weight to the

business ownership portion of the Wainwright study.

We turn now to the personal income component of the Wainwright

study. That analysis compared the personal incomes of MWBE

construction business owners to non-MWBE construction business

owners. As with the business ownership component of the study,

regression analyses were performed on the identified disparities to

filter out a litany of human capital and financial capital

variables, on the theory that the remaining disparities reflect the

effects of discrimination. After those regressions were performed,

the disparities for Hispanic and women owners were not substantial,

i.e., they resulted in disparity indices of 80% or more.

For the black owners, however, the income disparity ratio was

72.2%, which was statistically significant at two standard

58

deviations. While that disparity is some evidence of

discrimination against BBEs in the marketplace, there are at least

two reasons why the district court was not required to assign the

disparity controlling weight in evaluating whether, in view of all

the evidence, the County had a strong basis in evidence for

implementing a racial preference.

First, the business owner income component of the Wainwright

study fails to take account of firm size in its regression

analysis, because the Public Use Microdata Sample database contains

data on business owners, not their businesses. Recognizing that

weakness in the database, Dr. Wainwright testified that “I tried to

approach the size and capacity issue from an individual [business

owner] standpoint as best we could,” by including in his “financial

capital” variables the interest and dividend income earned by the

owner, as well as whether the business was incorporated. We do not

believe the district court was required to give regressions based

on those types of variables the same weight as regressions based on

more direct measures of firm size, which brings us to our second

point.

The district court was not required to consider the Wainwright

study in isolation from the other statistical evidence, including

the County Contracting Statistics and Marketplace Data Statistics.

In those other two statistical analyses, regressions conducted for

more direct measures of firm size successfully explained virtually

all of the identified disparities. Accordingly, the district court

was permitted to take account of the fact that “[t]he regression

59

analyses are ... conflicting,” 943 F. Supp. at 1575, and to assign

less weight to the disparity identified by the personal income

component of the Wainwright study, which was based on a more

indirect proxy for firm size. After all, we are required to review

the district court's findings in light of the entire record. We

turn now to the fifth and final category of statistical evidence

the County presented.

5. The Brimmer Study

The final component of the County's statistical presentation

was a study conducted under the supervision of Dr. Andrew F.

Brimmer. The Brimmer study concerns only black-owned construction

firms. The key component of the study is an analysis of the

business receipts of black-owned construction firms for the years

1977, 1982, and 1987, based on the Census Bureau's Survey of

Minority and Women Owned Businesses (“SMOBE”), which is produced

every five years. The analysis was designed to determine whether

disparities existed when the sales and receipts of black-owned

construction firms in Dade County were compared with the sales and

receipts of all Dade County construction firms.

The Brimmer study demonstrated the existence of substantial

disparities for black-owned construction business receipts for 1977

and 1987, but not 1982. For 1977 and 1987, the disparity indices

never exceeded 58% in any of the construction SIC codes. In 1982,

however, the disparity index for SIC 15 was 94%, or almost at

parity, and the disparity indices for SIC 16 and 17 were

substantially above parity, at 141% and 169%, respectively.

60

According to the County, however, the favorable results in 1982

were the result of heavy spending related to a federally funded

Metrorail project that required the use of race-conscious measures,

not to a lack of discrimination in the industry. However, the

Brimmer study made no attempt to filter out the effect of the

Metrorail project in calculating the disparity indices, apparently

because that information is not available from the SMOBE data.

The district court discounted the significance of the

unfavorable disparities identified in the Brimmer study for 1977

and 1987, primarily due to the study's complete failure to take

firm size into account. See 943 F. Supp. at 1573. Even assuming

that without the effect of the Metrorail project, the disparities

for 1982 would have been comparable to the unfavorable disparities

for 1977 and 1987, we cannot say that the district court's

treatment is an impermissible way to view the Brimmer study.

Because firm-size regression analyses were successful in explaining

most of the unfavorable disparities identified by other statistical

studies that the County introduced into evidence, we cannot hold

that the district court's evaluation of the Brimmer study was an

implausible view of the evidence in light of the entire record.

6. Summary

To summarize, the County's statistical evidence is subject to

more than one interpretation. The factfinder in this case examined

the statistical data, and found that it was insufficient to form

the requisite strong basis in evidence for implementing a racial or

ethnic preference, and that it was insufficiently probative to

61

support the County's stated rationale for implementing a gender

preference. For the reasons we have explained previously, we

cannot hold that the district court's view of the statistical

evidence is an impermissible one. As the Supreme Court has

explained, “Where there are two permissible views of the evidence,

the factfinder's choice between them cannot be clearly erroneous.”

Anderson, 470 U.S. at 574, 105 S. Ct. at 1512. Therefore, we

cannot hold that the district court clearly erred in finding that

the statistical evidence was too weak an evidentiary foundation to

bear the weight of any of the MWBE programs under the standards of

review applicable to them.

B. THE ANECDOTAL EVIDENCE

In addition to the statistical evidence, the County and the

intervenors introduced a great deal of anecdotal evidence about

discrimination in the County construction market. Most of that

anecdotal evidence was concerned with perceived discrimination

against BBEs, although a much smaller fraction of it was concerned

with discrimination against WBEs. No anecdotal evidence at all was

presented about discrimination against HBEs. The anecdotal

evidence took three basic forms: (1) the testimony of two County

employees responsible for administering the MWBE programs; (2) the

testimony, primarily by affidavit, of twenty-three MWBE contractors

and subcontractors; and (3) a survey of black-owned construction

firms. The district court's opinion contains a detailed

description of all three forms of the anecdotal evidence, see 943

F. Supp. at 1577-79. Therefore, we will keep our description of

62

that evidence to the minimum necessary to an understanding of its

substance.

The two County employees who presented anecdotal testimony

were Herbert Johnson and Gregory Owens. At the time of trial,

Johnson had worked for the County for over 15 years and he was then

in charge of the Dade County Performing Arts Center construction

project, which was projected to cost approximately $170 Million.

Owens is the former director of the County's Department of Business

and Economic Development, which implements the County's MWBE

programs. He served in that capacity from 1991 to 1995.

Both Johnson and Owens testified that the decentralized

structure of the County construction contracting system affords

great discretion to the numerous County employees that are involved

in the process. According to their testimony, that discretion

creates the opportunity for discrimination to infect the system.

Additionally, both employees (but primarily Owens) gave examples of

incidents of discrimination that they believed had occurred in

County contracting. For instance, Owens testified that MWBEs often

complain about getting lengthy “punch lists” -- lists of work that

must be redone -- when non-MWBEs on the same project did not

receive lengthy punch lists. Both witnesses testified about the

difficulty that MWBEs encounter in obtaining bonding and financing.

Additionally, the County and the intervenors introduced the

testimony of twenty-three MWBE contractors, all but seven of whom

testified solely by sworn declaration at the suggestion of the

district court. Those witnesses described numerous incidents in

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which they believe they have encountered discrimination in the Dade

County construction market, which included: situations in which a

project supervisor or foreman would refuse to deal directly with

a black or female firm owner, instead preferring to deal with a

white male employee; instances in which an MWBE owner knew itself

to be the low bidder on a subcontracting project, but was not

awarded the job; instances in which a low bid by an MWBE owner was

“shopped” to solicit even lower bids from non-MWBE firms; instances

in which an MWBE owner received an invitation to bid on a

subcontract within a day of the bid due date, together with a

“letter of unavailability” for the MWBE owner to sign in order to

obtain a waiver from the County; and instances in which an MWBE

subcontractor was hired by a prime contractor, but subsequently was

replaced with a non-MWBE subcontractor within days of starting work

on the project.

Finally, the County and the intervenors introduced a study

based on anecdotal accounts of discrimination. That study was

prepared by Dr. Joe R. Feagin, who chairs the Department of

Sociology at the University of Florida. In conducting his study,

Dr. Feagin interviewed persons at 78 construction firms that had

been certified by the County as black-owned businesses. According

to Dr. Feagin's report, those interviewees reported difficulties

and unfavorable experiences consistent with the ones described by

the individual witnesses, including: difficulty in securing bonding

and financing; slow payment by general contractors; unfair

performance evaluations that were tainted by racial stereotypes;

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difficulty in obtaining information from the County on contracting

processes; and higher prices on equipment and supplies than were

being charged to non-MWBE firms.

The picture painted by the anecdotal evidence is not a good

one. Clearly, numerous black (and some female) construction firm

owners in Dade County perceive that they have been the victims of

discrimination. Additionally, at least two County employees who

are intimately familiar with the County's procedures believe that

the County's decentralized contracting system affords enough

discretion to County employees to let discrimination taint the

process. The question is whether such evidence is sufficient to

overcome the weaknesses found by the district court in the County's

statistical data and to make the district court's findings clearly

erroneous in light of the entire record.

Several circuits, including this one, have discussed the value

and significance of anecdotal evidence in evaluating whether the

government has established a sufficient factual predicate to

justify a race-conscious or gender-conscious affirmative action

program. We have found that kind of evidence to be helpful in the

past, but only when it was combined with and reinforced by

sufficiently probative statistical evidence. In Cone Corp., we

held that anecdotal testimony “combined with the gross statistical

disparities uncovered by the County studies, provides more than

enough evidence on the question of prior discrimination and the

need for racial classification to justify the denial of a motion

for summary judgment,” 908 F.2d at 916 (emphasis added).

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Similarly, in Ensley Branch, we recognized that “[a]necdotal

evidence may also be used to document discrimination, especially if

buttressed by relevant statistical evidence,” 31 F.3d at 1565

(citation omitted). In that case, we held that a city had a

sufficient basis in evidence to support the existence of a gender-

conscious affirmative action program when “[t]he record before us

contains substantial anecdotal and statistical evidence of past

discrimination against women.” Id. at 1581 (emphasis added).

Our treatment of anecdotal evidence in Cone Corp. and Ensley

Branch is consistent with the formulation in Justice O'Connor's

Croson plurality opinion that “evidence of a pattern of individual

discriminatory acts can, if supported by appropriate statistical

proof, lend support to a local government's determination that

broader remedial relief is justified,” 488 U.S. at 509, 109 S. Ct.

at 730 (citation omitted) (emphasis added). In light of Croson's

guidance on the point, and our decisions in Cone Corp. and Ensley

Branch, we believe that anecdotal evidence can play an important

role in bolstering statistical evidence, but that only in the rare

case will anecdotal evidence suffice standing alone. While such

evidence can doubtless show the perception and, on occasion, the

existence of discrimination, it needs statistical underpinnings or

comparable proof to show that substantial amounts of business were

actually lost to minority or female contractors as the result of

the discrimination. Other circuits share this view as to the

limitations of anecdotal evidence. See Concrete Works, 36 F.3d at

1520 (10th Cir. 1994) (deeming “anecdotal evidence of public and

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private race and gender discrimination appropriate supplementary

evidence”) (emphasis added); Contractors Ass'n, 6 F.3d at 1003 (3d

Cir. 1993) (recognizing that the “combination of anecdotal and

statistical evidence is potent” and that anecdotal evidence, taken

alone, could satisfy Croson only in the “exceptional” case, if at

all) (emphasis added) (citation and internal quotation marks

omitted); Coral Constr., 941 F.2d at 919 (9th Cir. 1991)

(recognizing the value of anecdotal evidence when combined with a

“proper statistical foundation,” but stating that anecdotal

evidence alone “rarely, if ever, can ... show a systematic pattern

of discrimination necessary for the adoption of an affirmative

action plan”).

As we have explained, the district court's assessment of the

statistical evidence in this case is not clearly erroneous.

Without the requisite statistical foundation for the anecdotal

evidence to reinforce, supplement, support, and bolster, we cannot

say on the facts and circumstances of this case that the district

court clearly erred by failing to find that the anecdotal evidence

formed a sufficient evidentiary basis to support any of the MWBE

programs -- either taken alone or in combination with the

statistics that the district court found to be ambiguous at best.

By so holding, we do not set out a categorical rule that every case

must rise or fall entirely on the sufficiency of the numbers. To

the contrary, anecdotal evidence might make the pivotal difference

in some cases; indeed, in an exceptional case, we do not rule out

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the possibility that evidence not reinforced by statistical

evidence, as such, will be enough.

In this case, however, the district court did not find a

sufficient evidentiary foundation to support the MWBE programs in

the statistical evidence, in the anecdotal evidence, or in the

combination of the two. We may or may not have made that same

finding had we been in the district court's position, but we cannot

say that the district court's account of the evidence is

implausible in light of the entire record. Therefore, the district

court's judgment enjoining the continued operation of the MWBE

programs is due to be affirmed on that ground, i.e., because of the

County's failure to satisfy the factfinder that the programs rested

on a constitutionally sufficient evidentiary foundation. For the

sake of completeness, however, we will continue our review to the

next step of the analysis.

VII. NARROW TAILORING AND SUBSTANTIAL RELATIONSHIP

We turn now to the “narrow tailoring” prong of our strict

scrutiny review of the BBE and HBE programs, and then to the

“substantial relationship” prong of our intermediate scrutiny

review of the WBE program. Our discussion in this section requires

us to assume, contrary to our previous holding, that the County did

have a sufficient evidentiary foundation for enacting the MWBE

programs in the first place. By making that assumption, we can

address whether the programs are sufficiently linked to the

legitimate government purpose they are purported to serve, which is

remedying the effects of present and past discrimination against

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blacks, Hispanics, and women in the Dade County construction

market.

A. “NARROW TAILORING” AND THE BBE AND HBE PROGRAMS

As the Fourth Circuit has recognized, “The essence of the

'narrowly tailored' inquiry is the notion that explicitly racial

preferences ... must be only a 'last resort' option.” Hayes v.

North State Law Enforcement Officers Ass'n, 10 F.3d 207, 217 (4th

Cir. 1993); see also Croson, 488 U.S. at 519, 109 S. Ct. at 735

(Kennedy, J., concurring in part and concurring in the judgment)

(“[T]he strict scrutiny standard ... forbids the use even of

narrowly drawn racial classifications except as a last resort.”).

Even though, under a carefully tailored affirmative action program,

“innocent persons may be called upon to bear some of the burden of

the remedy,” Metro Broadcasting, Inc. v. Federal Communications

Comm'n, 497 U.S. 547, 596, 110 S. Ct. 2997, 3025-26 (1990)

(citation and internal quotation marks omitted), such programs must

be vigorously scrutinized to ensure that they do not go too far.

That is so, because “even in the pursuit of remedial objectives, an

explicit policy of assignment by race may serve to stimulate our

society's latent race consciousness, suggesting the utility and

propriety of basing decisions on a factor that ideally bears no

relationship to an individual's worth or needs.” United Jewish

Orgs. v. Carey, 430 U.S. 144, 173, 97 S. Ct. 96, 1014 (1977)

(Brennan, J., concurring in part).

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In this circuit, we have identified four factors that should

be taken into account when evaluating whether a race- or ethnicity-

conscious affirmative action program is narrowly tailored:

In making this evaluation, we consider: (1) the necessity

for the relief and the efficacy of alternative remedies;

(2) the flexibility and duration of the relief, including

the availability of waiver provisions; (3) the

relationship of numerical goals to the relevant labor

market; and (4) the impact of the relief on the rights of

innocent third parties.

Ensley Branch, 31 F.3d at 1569 (citations and internal quotation

marks omitted). The preceding four factors are not a mechanical

formula for determining whether an affirmative action program is

narrowly tailored, but they do provide a useful analytical

structure. Here, we will concentrate on the first factor, because

that is where the County's MWBE programs are most problematic.6

Turning now to the necessity for the relief and the efficacy

of alternative remedies, we flatly reject the County's assertion

that “given a strong basis in evidence of a race-based problem, a

race-based remedy is necessary.” That simply is not the law. If

a race-neutral remedy is sufficient to cure a race-based problem,

then a race-conscious remedy can never be narrowly tailored to that

problem. See Croson, 488 U.S. at 507, 109 S. Ct. at 729 (holding

6

However, we do note that we agree with the district court's

analysis of the remaining factors with respect to the BBE and HBE

programs, see 943 F. Supp. at 1582-83, with one exception. That

one exception is that we do not agree with the district court that

it was “irrational” for the County to set a goal of 19% HBE

participation when Hispanics make up more than 22% of the relevant

contracting pool in every SIC category, and more than 30% for SIC

15. We see nothing impermissible about setting numerical goals at

something less than absolute parity. Stated somewhat differently,

a local government need not choose between a program that aims at

parity and no program at all.

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that affirmative action program was not narrowly tailored where

“there does not appear to have been any consideration of the use of

race-neutral means to increase minority business participation in

city contracting”); id. at 509, 109 S. Ct. at 730 (plurality

opinion) (reserving race-conscious remedies for the “extreme case”

when “necessary to break down patterns of deliberate exclusion”);

see also, e.g., United States v. Paradise, 480 U.S. 149, 171, 107

S. Ct. 1053, 1066 (1987) (“In determining whether race-conscious

remedies are appropriate, we look to several factors, including ...

the efficacy of alternative remedies ....”). Supreme Court

decisions teach that a race-conscious remedy is not merely one of

many equally acceptable medications the government may use to treat

a race-based problem. Instead, it is the strongest of medicines,

with many potentially harmful side-effects, and must be reserved

for those severe cases that are highly resistant to conventional

treatment.

Here, the County has clearly failed to give serious and good-

faith consideration to the use of race and ethnicity-neutral

measures to increase BBE and HBE participation in the County

construction market. The legislative findings accompanying the BBE

ordinance merely contain the conclusory statement that “race

neutral programs cannot address the above problems and do not focus

limited County money, efforts and personnel on the problems caused

by racial discrimination.” That conclusion was based on an equally

conclusory analysis contained in the Brimmer study, and a report

that the Small Business Administration was able to direct only five

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percent of SBA financing to black businesses from 1968 to 1980. In

view of that perfunctory analysis, the County's conclusion that

race-neutral solutions are ineffective is “entitled to little or no

weight,” Croson, 488 U.S. at 500, 109 S. Ct. at 725, which is what

the district court gave it.

Insofar as the HBE program is concerned, the County conceded,

with admirable candor, that “the record is bare of any county

consideration of alternatives to an ethnic-conscious measures [sic]

or any experiences upon which to support its recital in the

ordinance of their ineffectiveness.” Having reviewed the record in

toto, we agree. It is clear as window glass that the County gave

not the slightest consideration to any alternative to a Hispanic

affirmative action program. Awarding construction contracts based

upon ethnicity is what the County wanted to do, and all it

considered doing, insofar as Hispanics were concerned.

The testimony of the County's own witnesses indicates that

many of the problems that face Black and Hispanic construction

firms could be addressed without the imposition of a race or

ethnicity-conscious remedy. As noted by the district court, 943 F.

Supp. at 1581, both Johnson and Owens testified as witnesses for

the County that the following factors cause problems for MWBE

contractors: the decentralized County contracting system, which

affords a high level of discretion to County employees; the

complexity of County contract specifications; difficulty in

obtaining bonding; difficulty in obtaining financing; unnecessary

bid restrictions; inefficient payment procedures; and insufficient

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or inefficient exchange of information. Virtually all of these

problems are problems caused by County processes and procedures,

which the County could change. Primarily, these problems facing

MWBE contractors are institutional barriers to entry that affect

any new entrant into the County construction market. If the

relative institutional youth of Black and Hispanic-owned

construction firms causes those barriers to have a disproportionate

impact on BBEs and HBEs, it follows that those firms should be

helped the most by dismantling those barriers, something the County

could do at least in substantial part.

The similarities between the race- and ethnicity-neutral

options available to the County, and those available to the City of

Richmond in Croson are striking. Writing for the plurality,

Justice O'Connor explained:

[T]he city has at its disposal a whole array of

race-neutral devices to increase the accessibility of

city contracting opportunities to small entrepreneurs of

all races. Simplification of bidding procedures,

relaxation of bonding requirements, and training and

financial aid for disadvantaged entrepreneurs of all

races would open the public contracting market to all

those who have suffered the effects of past societal

discrimination or neglect. Many of the formal barriers

to new entrants may be the product of bureaucratic

inertia more than actual necessity, and may have a

disproportionate effect on the opportunities open to new

minority firms. Their elimination or modification would

have little detrimental effect on the city's interests

and would serve to increase the opportunities available

to minority business without classifying individuals on

the basis of race. The city may also act to prohibit

discrimination in the provision of credit or bonding by

local suppliers and banks. Business as usual should not

mean business pursuant to the unthinking exclusion of

certain members of our society from its rewards.

488 U.S. at 509-10, 109 S. Ct. at 730.

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Despite that clear admonition in Croson, the record in this

case does not indicate that the County has even seriously

considered, and certainly has not tried, most of the race- and

ethnicity-neutral alternatives available to it for increasing black

and Hispanic participation in County contracting and for

eliminating discrimination that may be occurring in that

marketplace. Although the County does offer some limited technical

and financial aid that might benefit BBEs and HBEs, even those

half-hearted programs have not been evaluated for their

effectiveness.

Most notably, the record indicates that the County has not

taken any action whatsoever to ferret out and respond to instances

of discrimination if and when they have occurred in the County's

own contracting process. If such conduct has occurred -- and the

County's own anecdotal evidence suggests that it has on at least

some occasions -- the County has taken no steps to inform, educate,

discipline, or penalize its own officials and employees responsible

for the misconduct. The first measure every government ought to

undertake to eradicate discrimination is to clean its own house and

to ensure that its own operations are run on a strictly race- and

ethnicity-neutral basis. The County has made no effort to do that.

Nor has the County passed local ordinances to outlaw discrimination

by local contractors, subcontractors, suppliers, bankers, or

insurers. Instead of turning to race- and ethnicity-conscious

remedies as a last resort, the County has turned to them as a first

resort. Because the County's BBE and HBE programs are not narrowly

74

tailored, those programs would violate the Equal Protection Clause

even if they were supported by a sufficient evidentiary foundation.

B. “SUBSTANTIAL RELATIONSHIP” AND THE WBE PROGRAM

When a gender-conscious affirmative action program rests on a

sufficient evidentiary foundation, the government is not required

to implement the program only as a last resort. Under intermediate

scrutiny, the government may implement a gender preference so long

as it can show that the program is substantially related to an

important government interest. See supra Part V.B. Additionally,

under intermediate scrutiny, a gender-conscious program need not

closely tie its numerical goals to the proportion of qualified

women in the market. See Ensley Branch, 31 F.3d at 1582.

The district court drew no distinction between its analysis of

whether the County's BBE and HBE programs were narrowly tailored

and whether the WBE program bore a substantial relationship to the

County's stated rationale for implementing gender-conscious

affirmative action, in response to perceived discrimination against

women-owned contractors. That approach was error. Although the

County has set a participation goal for WBEs of 11%, when the

availability of WBE bidders ranges across SIC codes from 3.2% to

13.3%, the waiver provisions included in the WBE program make that

numerical target sufficiently flexible to withstand intermediate

scrutiny. If the WBE program rested on a sufficient evidentiary

foundation, we could not conclude that it would fail the

substantial relationship prong of the intermediate scrutiny

analysis. However, because the district court did not clearly err

75

in finding that the County had failed to present sufficient

probative evidence in support of its stated rationale for

implementing a gender preference, the district court's error in

applying the substantial relationship test does not change the

result.

VIII. CONCLUSION

Sitting as the trier of fact, the district court found that

the County lacked a strong basis in evidence to justify race- or

ethnicity-conscious affirmative action. Likewise, the district

court found that the County had failed to present sufficient

probative evidence in support of its stated rationale for

implementing a gender preference. Having reviewed the evidence, we

conclude that neither of those findings is clearly erroneous. We

also conclude that the County's race- and ethnicity-conscious

programs are not narrowly tailored to serve a compelling

governmental interest. The County's gender-conscious program is

sufficiently flexible to satisfy the substantial relationship prong

of intermediate scrutiny, but that is not enough in view of the

County's failure to present sufficient probative evidence of

discrimination against women in the relevant parts of the local

construction industry.

For the foregoing reasons, the district court's judgment

declaring unconstitutional Metropolitan Dade County's usage of

race-, ethnicity-, and gender-conscious measures in connection with

County construction projects and enjoining the County from using

those measures is AFFIRMED.

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