Featured Case

Fighting to End Preference Programs in Nebraska

In Re City of Omaha’s Contract Compliance Ordinance

Contact: Joshua P. Thompson or Ralph W. Kasarda

Status: Waiting for Omaha’s response to a demand letter

Summary: On November 4, 2008, the people of Nebraska adopted Measure 424 to prohibit the state, including its cities, from discriminating against or granting preferences on the basis of race and sex in the award of public contracts. Notwithstanding this constitutional command, the City of Omaha is granting preferences to businesses owned by preferred groups.

Omaha’s “disadvantaged business enterprises” (DBE) program classifies businesses based on the race or sex of the owners. If the company is owned 51% or more by a Black, Hispanic, Asian, or Pacific Islander, American Indian, or Alaskan Native, or female, the business is automatically considered disadvantaged and is treated differently than a business owned by a white male.
For example, Omaha establishes “participation goals” for some contracts reflecting the amount of public contract dollars that are to go to DBE subcontractors and will reject the bid of a contractor, even if it is the lowest bid, that does not meet the quota. For other contracts, Omaha will accept bids only from DBEs for a period of 30 days. A bid from a business owned by a white male will be accepted only if the contract was not awarded to a DBE. Also, Omaha is authorized to award certain contracts to a DBE that is not the low bidder.

Pacific Legal Foundation has been contacted by a group of Omaha residents and taxpayers to file a legal challenge to these preferential and discriminatory policies. As a preliminary step, PLF attorneys sent a demand letter to the City of Omaha on March 11, 2009. The Omaha City Council now is considering amendments to Omaha’s DBE program that will remove preferences based upon race.