Full opinion text
OPINION AND ORDER GRAHAM, District Judge. I. SUMMARY OF OPINION In this action the plaintiffs, The Associated General Contractors of America, Central Ohio Division (“AGC”) and Patricia Sobiech, its Assistant Executive Director, challenged the constitutionality of ordinances enacted by the city of Columbus, Ohio which required that firms owned by minorities and women receive a certain percentage of the dollar amount of subcontracts awarded on city construction projects each year. The AGC is an association of contractors engaged in the construction business in the city of Columbus whose members regularly seek construction contracts on city projects, both as prime contractors and subcontractors. On January 23, 1989, the Supreme Court of the United States announced its opinion in City of Richmond v. J.A. Croson Co., 488 U.S. 469, 109 S.Ct. 706, 102 L.Ed.2d 864 (1989), a landmark civil rights case which held that municipal affirmative action programs which set aside a certain percentage of city contracts for minority-owned firms must be supported by firm evidence of past discrimination in city contracting. The Court struck down a program of the City of Richmond, Virginia which required, on an annual basis, that 30% of the city’s construction dollars be paid to minority subcontractors. The city had justified this program on the ground that the city’s population was 50% black. The Court held that the city should have focused instead on the number of qualified minority contractors and whether they had received a proportionate share of city construction dollars. For many years, the city of Columbus had an affirmative action program for minority- and female-owned business enterprises (collectively “M/FBEs”) which included subcontracting goals of 10% for minority business enterprises (“MBEs”) and 2% for female business enterprises (“FBEs”) in city construction. In January of 1989, the city raised its subcontracting set-aside goals to 21% and 10% respectively. This was done without any evidence of past discrimination in city contracting and without any evidence of the number of qualified minority contractors or the amount of city construction dollars they had received. Several months later, this lawsuit was filed. In January of 1991, the city agreed that its set-aside program was unconstitutional and consented to an order which enjoined it from enacting any laws containing race- or gender-based preferences in city contracting without first obtaining the approval of this court. In the aftermath of the Croson decision, the city immediately began efforts to find evidence of discrimination which would support new affirmative action legislation. It hired consultants and held public hearings. Finally, in December of 1993, the city enacted the Equal Business Opportunity Code of 1993 (“EBO Code”). This legislation provides a variety of race- and gender-based preferences in city contracting, including subcontracting goals of 10% for MBEs and 7% for FBEs, as well as publicly funded bonding, financing and technical assistance programs for M/FBEs. In February of 1994, the city asked the court to dissolve the prior injunction and to permit the EBO Code to take effect. A trial was held to determine whether the new legislation and the evidence relied upon by the city meet the requirements of Croson. The city’s consultants collected data on the number of M/FBE construction firms in the Columbus Metropolitan Statistical Area (“MSA”) in order to calculate the percentage of available M/FBE firms. This is referred to as the rate of availability. The city’s consultants also calculated the percentage of city contracting dollars that were paid to M/FBE construction firms. This is referred to as the rate of utilization. With regard to the availability of M/FBE construction firms and their utilization as subcontractors on city construction projects, the best data presented by the city’s consultants showed the following: Availability of M/FBE construction firms in the Columbus MSA as a percentage of all firms MBEs FBEs 2.27% 4.49% Utilization of M/FBE construction firms as a percentage of city subcontracting dollars Year MBE Firms FBE Firms 1990 22.8% 10.5% 1991 8.2% 1.8% 1992 6.7% 13.0% 1993 5.7% .2% This data shows that for each of the years studied, the MBE share of city subcontracting dollars exceeded their proportionate representation in the Columbus construction market. The share of women-owned firms fluctuated widely, but for the entire three and one-half-year period, their share averaged 9.2%. The city pointed to the decline in MBE utilization after the suspension of the set-aside program as evidence of discrimination. The plaintiffs argued to the contrary that the decline in utilization of MBEs was attributable to the fact that the previous set-aside program had artificially inflated their share of subcontracting dollars to a level far above their rate of availability and that the decline simply represented the adjustment expected in a subcontracting market freed from set-aside requirements. Plaintiffs’ argument was supported by the city’s statistical evidence which showed that under the previous set-aside program, MBEs had received 33.5% of all subcontracting dollars in 1984, 47.6% in 1986 and 27.9% in 1988. While the utilization of M/FBEs has decreased since the suspension of the previous set-aside program, their share of subcontracting dollars has nevertheless remained well above their rate of availability. Although the trial was held in May of 1995, the city did not provide the court with statistical evidence of the rate of M/FBE utilization after May of 1993, so the court is unable to determine whether the rate of utilization of M/FBE firms has continued to decline. The city’s statistical evidence does not support a finding of discrimination against M/FBE firms in city subcontracting. In Columbus, prime contracts are awarded on the basis of competitive bidding and all contracts over $10,000 must be approved by city council and the mayor. There was no evidence that the city ever failed to award a prime contract to a minority firm that was the lowest bidder. The city did not determine the number of M/FBE firms which are qualified to perform construction services for the city as prime contractors, so the evidence did not permit a comparative analysis of the prime contract dollars awarded to M/FBEs. However, there was evidence of the number of prime contracts awarded to M/FBEs which indicated that they received the following share: Year MBE Firms FBE Firms 1991 10.3% 1.3% 1992 7.48% 6.12% 1993 4.4% 4.44% The city’s statistical evidence does not support a finding of discrimination in the award of prime contracts. Under Croson, an affirmative action program may be justified even in the absence of evidence of discrimination by the municipality itself if there is firm evidence of discrimination in the private sector and that the city is an active or passive participant in that discrimination. When the city enacted the EBO Code of 1993, it relied on this ground also. In finding race and gender discrimination in the private sector of the Columbus construction industry, the city relied on statistical evidence which indicated that there are proportionately fewer construction firms owned by women and minorities compared to the percentage of women and minorities in the general population of the Columbus metropolitan area and that the income of M/FBE firms is less than that of non-M/FBE firms. The evidence showed, however, that M/FBE firms tend to be smaller and newer than non-M/FBE firms, which would explain why their revenues are lower. The city’s evidence of the rates of business ownership was consistent with national demographic statistics. Comparative rates of business ownership are the result of many factors, including, no doubt, a history of discrimination against minorities and women in certain industries. However, in Croson the Supreme Court held that government programs which create race- and gender-based preferences cannot be justified by speculation about how many minority firms might exist absent past societal discrimination. 488 U.S. at 499, 109 S.Ct. at 724-25. As the Ninth Circuit Court of Appeals noted in Coral Construction Co. v. King County, 941 F.2d 910, 925 (9th Cir.1991), “[t]he task of remedying society-wide discrimination rests exclusively with Congress.” The city also investigated discrimination in city construction and the Columbus construction industry by interviewing minority and female business owners and by receiving testimony at public hearings. This kind of narrative evidence is generally referred to as anecdotal evidence. The city’s investigation of anecdotal evidence of discrimination was poorly executed. It was not always focused on the relevant time and place. Many of the anecdotes were lacking in essential details. No efforts were made to verify reports of discrimination.' The emphasis of the investigation was on perceptions of discrimination, not actual discrimination. There was no attempt to determine whether similarly situated majority-owned firms were treated more favorably than M/FBE firms. Political pressures may have clouded the factfinding process. The city’s consultants, chosen without competitive bidding, were not impartial investigators, but aggressive advocates of minority set aside legislation as were some of the most vocal witnesses. There was no evidence that complaints of discrimination had been filed against any of the city’s prime contractors or that there had been any findings of race or gender discrimination against local construction firms by the Ohio Civil Rights Commission or any court. There was no credible evidence that the city was guilty of race- or gender-based discrimination in the award of city construction contracts or that it was an active or passive participant in discrimination in the private sector. Appellate courts which have interpreted and applied the Croson decision have held that anecdotal evidence alone will rarely suffice to show the kind of systemic pattern of discrimination necessary to support race- and gender-based preferences, and that anecdotal evidence is most useful as a supplement to strong statistical evidence. See, O’Donnell Construction Co. v. District of Columbia, 963 F.2d 420, 427 (D,C.Cir.l992); Coral Construction, 941 F.2d at 919. Here, as noted, the statistical evidence did not support a finding of discrimination. The anecdotal evidence in this case fell far short of proof pf pervasive discrimination in the private sector. Croson requires that legislation containing race- and gender-based preferences must be narrowly tailored to accomplish the goal of remedying past discrimination. In order to satisfy this requirement, a local government must first consider race- and gender-neutral means for increasing M/FBE participation. In the construction industry, such race- and gender-neutral efforts would include programs which would provide all small or newly formed firms with technical assistance and assistance in bonding and financing. The city did not give serious consideration to race- and gender-neutral remedies before enacting the EBO Code. The EBO Code provides for technical assistance and assistance with bonding and financing, but although these programs will be paid for by the tax dollars of all citizens, their benefits are limited to firms owned by African Americans and women. Firms owned by other minorities, such as Hispanics, Native Americans and Asian Americans are excluded, as are majority-owned firms. Thirty M/FBE firms provided interviews and testimony about the Columbus construction industry. They were almost equally divided between the public sector and private sector of the construction market. This suggests that in Columbus, M/FBE firms do not rely heavily on governmental affirmative action programs, but that they are able to compete successfully in the private market. All of the M/FBE firms were experiencing some degree of success and many were quite successful. Half of those who responded to questions about firm income reported gross receipts in excess of $1 million per year. There was evidence that M/FBE firms have occupied a prominent role in some of the city’s largest recent construction projects in both the public and private sectors, including the Arthur James Cancer Center, a $54 million-dollar project on which the Sherman R. Smoot Company was the general contractor; the much publicized Ohio Statehouse restoration project, a $112.7 million-dollar project, on which Smoot was the construction manager; the Tuttle Crossing mall, a $45 million-dollar project in which Moody/Nolan Ltd. is the project architect and the Smoot firm and Brothers Construction Co. are the general contractors; and the BaneOne Corporate Center at the Polaris Centers of Commerce, a $55 million-dollar project being built by a joint venture between Turner Construction Co., Brothers Construction Co. and Williams Builders. Smoot, Moody/Nolan, Brothers and Williams are all MBEs. The president of Brothers is an African-American woman. The evidence showed that M/FBE set-aside programs do have some beneficial-effects. They require majority contractors to establish relationships with M/FBE firms and they give M/FBE firms the chance to demonstrate their competence. They provide an economic incentive for the formation of new M/FBE firms and provide opportunities for women and minorities in an industry in which they have been historically underrepresented. However, such programs may also have undesirable consequences. They may perpetuate racial and gender stereotypes by creating the impression that firms owned by minorities and women are not as capable as other firms. They may also breed racial and gender-based hostility when non-M/FBE firms lose work or are forced to pay higher prices because of them. Nevertheless, the court remains committed to uphold race- and gender-based preferences if they are supported by firm evidence of discrimination and they are narrowly tailored to accomplish a remedial purpose. More than thirty years ago, Dr. Martin Luther King challenged our society to judge all individuals on the content of their character rather than the color of their skin. His dream was one of a colorblind society in which race no longer played a role in determining the success or failure of an individual. Today, in many respects, our society continues to suffer from the lingering effects of racial and gender-based discrimination. Notwithstanding this, the recent successes of African-Americans and women in every sector of our society suggests that there is movement, albeit gradual, toward the accomplishment of Dr. King’s dream. Clearly, our society has not fully achieved Dr. King’s dream, and this court does not assume that racism and sexism no longer exist, but there is evidence that significant progress has been made since Dr. King issued his challenge more than thirty years ago. This court is bound to follow the law as set forth by the Supreme Court of the United States. That court clearly held in Croson that municipal programs which create race- and gender-based preferences violate the Equal Protection Clause of the Fourteenth Amendment of the United States Constitution unless there is a firm basis in the evidence that such programs are necessary to remedy past discrimination and that such programs are narrowly tailored to accomplish such a remedial purpose. After careful consideration, this court has found that the Columbus EBO Code of 1993 fails this test. II. HISTORY OF CITY’S AFFIRMATIVE ACTION LEGISLATION The city of Columbus has had some form of affirmative action legislation affecting city construction for over twenty years. The first such ordinance was enacted in May of 1975. It established an office of contract compliance and authorized the appointment of a contract compliance board. The affirmative action plan established by this legislation was directed at the racial composition of a contractor’s work force. It established a goal for the employment of minorities equal to the percentage of the minority population in the Columbus metropolitan area. Various enforcement mechanisms were provided. These provisions remained in effect until July of 1981 when the city added provisions which required construction prime contractors doing business with the city to award 10% of the value of their contracts to minority-owned firms and 2% to female-owned firms. In May of 1983, the city created the Minority and Female Business Development Division (“MFBD Division”) to replace the office of contract compliance. The existing affirmative action goals were not changed. The MFBD Division was assigned the task of implementing and monitoring compliance with the city’s affirmative action ordinances. The subcontracting goals of 10% and 2% remained in effect for seven and one-half years, until they were raised to 21% and 10% in January of 1989. The circumstances which led to the city’s decision to more than double the subcontracting goals were set forth in this court’s opinion in Ohio Contractors Ass’n v. City of Columbus, 733 F.Supp. 1156 (S.D.Ohio 1990). Briefly, in 1990, the city was preparing to host an international floral and garden exposition known as Ameri-Flora ’92. The city’s black business community lobbied the city for a larger share of the financial benefits flowing from that project and persuaded it to insert 21% goals for MBEs and 10% goals for FBEs in the lease which controlled construction expenditures for that project. This led to the city’s decision on January 23, 1989, the same day Cro-son was decided, to amend its affirmative action ordinance by raising the minority and female set-aside goals to the same levels established for the AmeriFlora project. In response to the Ohio Contractors Association’s challenge of the AmeriFlora affirmative action goals, the city repealed them and agreed to a permanent injunction eliminating them from all AmeriFlora projects funded by the city. III. THE EQUAL BUSINESS OPPORTUNITY CODE OF 1993 A. Provisions of the EBO Code The new affirmative action legislation which the city seeks to implement contains a variety of race- and gender-based preferences for M/FBE firms. The definition of minority is limited to African Americans. Section 3921.01 of the EBO Code creates a twelve-member commission to be known as the Equal Business Opportunity Commission (“EBOC”) which has the responsibility for providing oversight of the implementation, review and modification of the Equal Business Opportunity Program. Section 3921.02 of the EBO Code creates the Equal Business Opportunity Office (“EBOO”) as a division within the department of administrative services and provides that the EBOO administrator shall be its chief administrative officer with the responsibility for administration of the EBO Code. Chapter 3922 provides for a system of contractor/vendor registration and M/FBE certifieátion which includes a graduation provision for firms whose annual sales exceed the average sales for firms in its sector of the industry for two consecutive years. Section 3923.02 is captioned “Solicitation for Small Contracts” and directs the EBOO to establish procedures in conjunction with city agencies to enhance the award of contracts under $10,000 to M/FBEs by requiring a certain number of M/FBEs to be solicited on all requests for bids on contracts under $10,000. One of the procedures authorized by this section would involve soliciting bids from a total of three firms, two of which are required to be M/FBEs, with the third selected at random from a list of all registered vendors. Section 3924.01 of the EBO Code requires the EBOO to establish a financing assistance program solely for the benefit of M/FBEs. This section directs the EBOO to examine the feasibility of establishing “alternative and innovative” programs to assist M/FBEs in obtaining equity financing, and to examine the feasibility of developing a linked deposit program which would require the banks in which the city deposits its funds to establish comprehensive financing programs for M/FBE firms, including special lending programs. Section 3924.02(E) of the ordinance requires the EBOO to examine the feasibility “of using public funds to leverage private resources to establish a bonding pool for the issuance of bonds to M/FBEs on City contracts[.]” Section 3924.03 requires the EBOO to establish a clearinghouse of technical assistance programs and resources for M/FBEs. Non-M/FBEs are not entitled to participate in the benefits of the financing and technical assistance programs, nor would they be entitled to participate in the publicly financed bonding pool. Section 3925.01 of the EBO Code requires the establishment of annual M/FBE participation goals for city contracting. Paragraph (B) of this section sets the initial annual M/FBE participation goals for construction at 10% for MBEs and 7% for FBEs. The ordinance states that the annual goals “are only intended to be benchmarks for evaluating the overall performance of the EBO program on an annual basis” and that they “are not, and shall not be quotas.” Section 3925.01(D). Paragraph (E) of this section provides: “On individual contracts or projects, there is no requirement that these annual M/FBE participation goals be met.” Paragraph (F) of this section provides that the city will make efforts to meet the annual percentage goals based • upon the dollar amounts of construction purchased from qualified M/FBEs and “[b]y establishing specific M/FBE goals on a contract by contract basis as set forth in Section 3926.01.” Section 3926.01 requires the EBOO to “establish specific M/FBE goals on a contract by contract basis in order to achieve the objectives of this Code.” Specific contract goals are to be established according to criteria established by the EBOO which must include (but are not limited to) eight criteria listed in the ordinance. The specific M/FBE goals must be stated as part of the contract specifications put out for bid, and in order for a bidder to be deemed responsive, the bidder must either meet or exceed the stated M/FBE participation goals for the contract or demonstrate to the satisfaction of the EBOO that it has exercised good faith efforts to achieve the goals. The specific requirements of good faith efforts are listed in Section 3926.02, in the form of eight non-exhaustive factors. In addition, the EBO administrator may grant an administrative waiver of the M/FBE participation goals in accordance with Section 3926.03, which is captioned “Waiver for Detriment to Public Health, Safety and Welfare.” Sections 3927.04 and 3927.05 authorize the EBOO to propose race- and gender-based preferences for M/FBE prime contractors, including price preferences and a sheltered market program subject to approval of city council and the mayor. Section 3928.01 provides for administrative appeals from determinations of non-compliance with the requirements of the EBO Code or denials of certification as an M/FBE. Section 3928.02 provides criminal sanctions for fraud in seeking M/FBE certification, for false reporting of M/FBE utilization, and for “fronting” activity, which is defined as collusion between an M/FBE and a majority firm for the purpose of exploiting the M/FBE’s certification status to primarily benefit a majority firm without the performance of any commercially useful function by the M/FBE. Section 3928.05 provides that the EBO program shall be terminated by city council and the mayor based upon a determination that the ongoing effects of marketplace discrimination in the Columbus MSA have been fully remedied and that statistical disparities in the utilization of M/FBEs have been eliminated in the public arid private sectors of the Columbus marketplace. Section 3928.06 is a sunset provision which requires that the EBO program shall be considered for reau-thorization five years from its effective date and may be extended for additional five-year periods upon a finding that its purposes and objectives have not been achieved. B. Effect of The EBO Code on Non-M/FBEs Section 3926.01 of the ordinance creates barriers for non-M/FBE subcontractors which make it difficult or impossible for them to compete for a significant percentage of subcontracts on city construction projects. Although the EBOO is not required to adhere to the annual M/FBE participation goals for any single contract, it is required to achieve the EBO Code objectives, which include annual M/FBE participation goals amounting to 17% of total annual city construction contracting and procurement dollars. Thus, while a given- contract may or may not contain specific M/FBE goals, it is obviously the city’s intent to impose goals in sufficient amounts on a sufficient number of contracts to ensure that on an annual basis, M/FBE firms receive a percentage of total contract awards equal to the annual M/FBE goals. A prime contractor who is not prepared to meet the M/FBE goals stipulated for a contract and who still wishes to bid must satisfy many additional requirements, and proceed with considerable uncertainty as to whether his bid will be deemed responsive. The practical effect of such a scheme is that a contractor bidding on a city contract which incorporates M/FBE contracting goals will set aside the stipulated percentage of the subcontract dollars for M/FBEs and make every effort to meet or exceed the M/FBE goal. Non-M/FBE subcontractors are unable to compete on an equal footing for all city contracting business, and if the annual goals are achieved, they will be effectively excluded from 17% of the city’s subcontracting market. Furthermore, non-M/FBEs are denied the benefit of bonding, insurance and technical assistance programs supported by public funds and public assets. Thus, the EBO Code of 1993 contains a variety of race- and gender-based preferences which must be examined in light of Croson and its progeny. IV. LEGAL PRINCIPLES APPLICABLE TO RACE- AND GENDER-BASED PREFERENCES The Equal Protection Clause guarantees that no state shall “deny to any person within its jurisdiction the equal protection of the laws.” Fourteenth Amendment, § 1, United States Constitution. The central purpose of the Clause “is to prevent the States from purposefully discriminating between individuals on the basis of race.” Shaw v. Reno, 509 U.S. 630, 642, 113 S.Ct. 2816, 2824, 125 L.Ed.2d 511 (1993). Thus, preferences based on racial criteria must receive a “ ‘most searching examination to make sure that they do not conflict with constitutional guarantees.’ ” Wygant v. Jackson Bd. of Educ., 476 U.S.. 267, 273-74, 106 S.Ct. 1842, 1847, 90 L.Ed.2d 260 (1986) (plurality opinion) (quoting Fullilove v. Klutznick, 448 U.S. 448, 491, 100 S.Ct. 2758, 2781, 65 L.Ed.2d 902 (1980) (opinion of Burger, C. J.)). All governmental classifications by race are subject to “strict scrutiny,” regardless of whether they are supported by a “remedial” or “benign” purpose. City of Richmond v. J.A. Croson Co., 488 U.S. 469, 493-94, 109 S.Ct. 706, 721-22, 102 L.Ed.2d 854 (1989). In this circuit, gender-based affirmative action plans are also subject to strict scrutiny when challenged under the Equal Protection Clause. Brunet v. City of Columbus, 1 F.3d 390, 404 (6th Cir.1993). The party defending the plan bears the burden of producing evidence that the plan is constitutional, while the party challenging the plan retains the ultimate burden of proving its unconstitutionally. Aiken v. City of Memphis, 37 F.3d 1155, 1162 (6th Cir.1994). The strict scrutiny analysis involves two inquiries: 1) Does the racial or gender classification serve a compelling governmental interest; and 2) are the means chosen by the governmental entity to protect that interest narrowly tailored to the achievement of that goal? Adarand Constructors, Inc. v. Pena, — U.S.-,-, 115 S.Ct. 2097, 2117, 132 L.Ed.2d 158 (1995); Aiken, 37 F.3d at 1162. Strict scrutiny is meant to ensure that the purpose of a racial or gender preference is remedial. Hopwood v. State of Texas, 78 F.3d 932, 951 (5th Cir.1996). Requiring strict scrutiny is the best way to guarantee that courts will consistently give racial or gender classifications a detailed examination, both as to the ends to be met and the means used to achieve those ends. Adarand, — U.S. at-, 115 S.Ct. at 2114. A government actor possesses a compelling state interest when its concern is remedying past discrimination. Shaw, 509 U.S. at 654-56, 113 S.Ct. at 2831; United Black Firefighters Ass’n v. City of Akron, 976 F.2d 999, 1009 (6th Cir.1992). However, before classifications based on race or gender may be employed, the government actor must have “a strong basis in evidence” of past discrimination on the part of the governmental entity and the need for remedial action. Miller v. Johnson, — U.S.-,-, 115 S.Ct. 2475, 2491, 132 L.Ed.2d 762 (1995). See also, Croson, 488 U.S. at 500, 109 S.Ct. at 725 (requiring “strong” or “convincing” evidence of past discrimination by that governmental unit). A prima facie case of intentional discrimination is sufficient to support a public employer’s affirmative action plan. Brunet, 1 F.3d at 405. A mere assertion by the governmental entity that the remedial action is required is not sufficient. Miller, — U.S. at-, 115 S.Ct. at 2491. The party seeking to implement a program remedying the present effects of past discrimination must produce evidence that the identified effects were caused by past discrimination, that the effects are of sufficient magnitude to justify the program, and that the program was adopted to remedy the identified present effects of past discrimination. Hopwood, 78 F.3d at 952; Podberesky v. Kirwan, 38 F.3d 147, 153 (4th Cir. 1994). As the Supreme Court noted in Croson, 488 U.S. at 501, 109 S.Ct. at 725-26, “blind judicial deference to legislative or executive pronouncements of necessity has no place in equal protection analysis.” See also, F. Buddie Contracting Co. v. City of Elyria, Ohio, 773 F.Supp. 1018, 1027 (N.D.Ohio 1991) (presumption of regularity afforded legislative acts does not apply to classifications suspect under the Equal Protection Clause; legislative body cannot rest upon a generalized assertion as to the classification’s relevance to the legislative body’s goals). The existence of societal discrimination alone cannot support a racial or gender classification. Aiken, 37 F.3d at 1162. Likewise, nonracial factors such as deficiencies in working capital, inability to meet bonding requirements, unfamiliarity with bidding procedures and an inadequate track record do not suffice. Croson, 488 U.S. at 498-99, 109 S.Ct. at 724-25. Rather, there must be some showing of prior discrimination by the governmental unit involved, either as an “active” or “passive” participant. Croson, 488 U.S. at 492, 109 S.Ct. at 721; Wygant, 476 U.S. at 274, 276, 106 S.Ct. at 1847, 1848; Aiken, 37 F.3d at 1162. Thus if the governmental unit can show “that it had essentially become a ‘passive participant’ in a system of racial exclusion practiced by elements of the local construction industry,” the governmental unit “could take affirmative steps to dismantle such a system.” Croson, 488 U.S. at 492, 109 S.Ct. at 721. A government unit can become a “passive” participant by, for example, paying public contract dollars to prime contractors who discriminate in the award of subcontracts. Concrete Works of Colorado v. City and County of Denver, 36 F.3d 1513, 1523 (10th Cir.1994). See also, Coral Construction Co. v. King County, 941 F.2d 910, 916 (9th Cir.1991) (infusion of tax dollars into a discriminatory industry may be sufficient). The types of evidence routinely presented to show the existence of a compelling interest include statistical and anecdotal evidence. United Black Firefighters, 976 F.2d at 1010-1012. The two types of evidence are frequently used in conjunction, see Croson, 488 U.S. at 509, 109 S.Ct. at 730, and, in fact, courts have expressed concerns about a governmental entity relying exclusively on one or the other. See Maryland Troopers Ass’n, Inc. v. Evans, 993 F.2d 1072, 1077 (4th Cir. 1993) (noting that race-conscious remedies upheld by the Supreme Court have been supported by both statistical and anecdotal evidence, and that “[i]nferring past discrimination from statistics alone assumes the most dubious of conclusions: that the true measure of racial equality is always to be found in numeric proportionality.”); O’Donnell Construction Co. v. District of Columbia, 963 F.2d 420, 427 (D.C.Cir.1992) (anecdotal evidence may suffice to prove individual claims of discrimination but rarely can such evidence show a systemic pattern of discrimination); Coral Construction, 941 F.2d at 919. Where gross statistical disparities exist, they alone in a proper case may constitute prima facie proof of a pattern or practice of discrimination. Croson, 488 U.S. at 501, 109 S.Ct. at 725-26. Appropriate statistical evidence setting forth a prima facie case of discrimination is sufficient to provide a strong basis in evidence to support an affirmative action plan. Aiken, 37 F.3d at 1163. Where there is a significant statistical disparity between the number of qualified minority contractors willing and able to perform a particular service and the number of such contractors actually engaged by the locality or the locality’s prime contractors, an inference of discriminatory exclusion could arise. Croson, 488 U.S. at 509, 109 S.Ct. at 730. However, the existence of a gross disparity is not conclusive on the issue of discrimination because other factors unrelated to race may account for the disparity, and those opposing the affirmative action plan may present evidence to rebut the inference of discrimination produced by a gross statistical disparity. United Black Firefighters, 976 F.2d at 1011. Statistical evidence may be rebutted by a neutral explanation for the statistical disparities or by attacking the statistics themselves by showing that the statistics are flawed, by demonstrating that the disparities shown by the statistics are not significant or actionable, or by presenting contrasting statistical data. Coral Construction, 941 F.2d at 921. Anecdotal evidence is most useful as a supplement to strong statistical evidence. Concrete Works, 36 F.3d at 1520; O’Donnell Construction, 963 F.2d at 427. The presence or absence of complaints of discrimination is also relevant. See Cone Corp. v. Hillsborough County, 908 F.2d 908, 916 (11th Cir. 1990) (noting evidence of complaints made to the county regarding discrimination by prime contractors); Long v. City of Saginaw, 911 F.2d 1192, 1196 (6th Cir.1990) (noting that no complaints regarding discrimination in police hiring had been filed with any government agency). The second branch of the strict scrutiny analysis is whether the program at issue is narrowly tailored. The Supreme Court in Croson, 488 U.S. at 507-508, 109 S.Ct. at 729-30, identified four factors to be considered: 1) whether the city has first considered race-neutral means to increase minority participation, such as a race-neutral program of city financing for small firms, but found those programs to be ineffective; 2) the basis offered for the set-aside percentage selected; 3) whether the program provides for waivers of preference or other means of affording individualized treatment to contractors; and 4) whether the program applies only to minority businesses who operate in the geographic jurisdiction covered by the program. Other considerations include the flexibility and duration of the relief, that is, whether the program is appropriately limited such that it will not last longer than the discriminatory effects it is designed to eliminate, the relationship of numerical goals to the relevant labor market, and the impact of the relief on the rights of third parties. Adarand, — U.S. at-, 115 S.Ct. at 2118; United States v. Paradise, 480 U.S. 149, 171, 107 S.Ct. 1053, 1066-67, 94 L.Ed.2d 203 (1987). In the context of the construction industry, race-neutral means may include simplification of a city’s bidding procedures, a relaxation of bonding requirements and other barriers caused by bureaucratic inertia, training and financial aid for disadvantaged entrepreneurs of all races, and the enactment of laws prohibiting discrimination in the provision of credit or bonding by local suppliers and banks. Croson, 488 U.S. at 510-511, 109 S.Ct. at 730-31. Strict scrutiny does not require the exhaustion of every possible alternative, however irrational, costly, unreasonable or unlikely to succeed. Coral Construction, 941 F.2d at 923. However, the Sixth Circuit cautioned in Aiken, 37 F.3d at 1164, that political pressures may prevent a city from utilizing racially neutral remedies. When such pressures are present, racially neutral remedies often will remain untried, absent legal action by those persons adversely affected by the race-based relief. Under such circumstances, the courts must take special care as they engage in their “most searching examination” of whether racial preferences have been shown to be necessary, Wygant, 476 U.S. at 273, 106 S.Ct. at 1846, since that examination will not be undertaken by any other body. Id. The scope of the remedy must depend' upon the scope of the violation. O’Donnell Construction, 963 F.2d at 425. To pass constitutional muster, racial or gender classifications must be necessary to the accomplishment of their legitimate purposes. Long, 911 F.2d at 1196. Limiting the duration of a race- or gender-conscious remedy “which clearly impacts adversely upon the plaintiffs is a keystone of a narrowly tailored plan.” Detroit Police Officers Ass’n v. Young, 989 F.2d 225, 228 (6th Cir.1993). Flexibility forbids the mechanistic application of fixed quotas. Peightal v. Metropolitan Dade County, 26 F.3d 1545, 1557 (11th Cir.1994). A valid program should include a waiver system that accounts for the availability of qualified minority or female businesses and whether those businesses have suffered from the effects of past discrimination by the governmental unit or prime contractors operating within the governmental unit’s jurisdiction. Coral Construction, 941 F.2d at 924-925. See also, Croson, 488 U.S. at 508, 109 S.Ct. at 729-30 (noting the defects in a waiver provision which-focused solely on the availability of minority business with no inquiry into whether or not the particular minority business seeking a racial preference had suffered from the effects of past discrimination by the city or prime contractors.) A valid program must also be limited in its effective scope to the boundaries of the enacting jurisdiction. Coral Construction, 941 F.2d at 922. The relevant question is not one of business location, but of business participation in the construction industry within the relevant geographical area, that is, whether the business has been discriminated against within the boundaries of the governmental entity. Id. at 925. V. THE CITY’S EFFORTS TO ESTABLISH A FACTUAL PREDICATE FOR RACE- AND GENDER-BASED PREFERENCES A. The City’s Outside Consultants 1. Beatty & Roseboro (1989) The city’s efforts to establish a factual predicate for race- and gender-based' preferences in city contracting began in July of 1989. The court made reference to this initial effort in its previous order of June 20, 1990, pp. 10-15, which denied defendants’ motion to dismiss on grounds of standing and mootness: The evidence offered by the plaintiffs in opposition to defendants’ motion to dismiss suggests that serious questions may exist regarding the impartiality and methodology of the procedures the City has followed in an effort to insure that its affirmative action ordinances comply with the constitutional mandate of the Supreme Court in Croson. As noted above, on July 17,1989, the City authorized the retention of outside consultants to conduct a statistical analysis of the City’s contracting history. The outside consultants were the law firm of Beatty & Roseboro, headed by Otto Beatty, Jr., a prominent black attorney and member of the Ohio General Assembly, who has sponsored several set aside bills. Mr. Beatty had offered his services to Columbus City Council President, Jerry Hammond, on June 5, 1989, indicating that he had “prepared a methodology to document the need for [a set aside plan] in the city.” Beatty’s correspondence indicates that both he and Hammond had strong preconceived notions regarding the need for a set aside program which presumed the existence of racial discrimination. It was apparently Mr. Beatty’s advice which prompted City Council to amend its affirmative action ordinances by deleting the numerical goals for the specific purpose of rendering the issues in this case moot. Mr. Beatty’s legal strategy is set forth in his letter of November 21, 1989 to the Minority Business Enterprise Legal Defense and Education fund in Washington, D.C., in which he referred to his representation of both the City of Columbus and Montgomery County, Ohio and set forth his legal strategy ... On November 20, 1989, Mr. Beatty issued a report entitled the “City of Columbus MBE/FBE Study” finding that during the period 1969 to 1989 minority business enterprises received only 1.52% of the 1.2 billion dollars in construction spending by the city during that period. Following the report, Mr. Beatty conducted two public hearings on behalf of council on January 18th and March 8th, 1990. Plaintiffs allege that the Beatty study overstates the monetary amounts expended on city contracts and understates the number of such dollars which flowed to MBEs.... Plaintiffs further allege that the Beatty report reflects only city monies paid directly to minority contractors by the city and fails to account for millions of dollars of payments by majority contractors to minority subcontractors on city projects .... Plaintiffs further point out that the Beatty study does not attempt to identify the pool of qualified minority business enterprises, which is a necessary predicate to a determination of whether or not a statistical analysis of contract dollars awarded to minority business enterprises is disproportionately low. See Croson, [488 U.S. at 469, 495-501, 507-08], 109 S.Ct. at 706, 723-25, 729. Plaintiffs raise further objections to the fairness and objectivity of Mr. Beatty’s fact finding process, specifically the use of his own “copyrighted” affidavit which was sent to over 1,000 MBEs over the signature of Council President Hammond. Plaintiffs suggest that this affidavit entitled “Data Discrimination Bank Form” was not a neutral questionnaire designed to determine whether discrimination had occurred but was instead “a blatant effort to manufacture evidence” because, by its very terms, it presumed the existence of discrimination and proffered alternative responses consistent with that assumption. (AGC’s memorandum contra motion to dismiss, p. 31). Plaintiffs also dispute the fairness of the hearings conducted by Mr. Beatty and refer to an exhibit consisting of a memorandum to Mr. Beatty from his legal associate describing the testimony of one of the witnesses at the January 18th hearing as follows: The next speaker was a Mr. Randall Gaddis, who is the Second Vice President of Gaddis & Son, a major concrete contractor in Columbus. Mr. Gaddis stated that in March his company will have been in business in central Ohio for nineteen (19) years. Mr. Gaddis stated that there was no obvious discrimination which his firm had suffered. Mr. Gaddis is obviously a very important witness. His testimony is no good and in fact hurts the cause of set-asides. Specific instances of discrimination are needed from him. It is important that Mr. Gad-dis’ father be brought in, read the Riot Act and be made to submit an affidavit which would contradict that to which his son testified. (Benton depo, Ex. 16). Plaintiffs suggest that Mr. Beatty has a deep personal and philosophical commitment to minority set aside programs and that instead of conducting an impartial factual investigation to determine whether or not there is a historical pattern of discrimination against minorities in employment, contracting and subcontracting for city construction, Mr. Beatty is operating as an advocate, marshalling and molding the evidence so as to justify a minority set aside program. Plaintiffs suggest that it is unrealistic for City Council to expect Mr. Beatty to protect the interests of majority citizens and firms as required by the Supreme Court’s Croson decision. The court is not passing on any of these claims at this time. However, it does appear that plaintiffs have raised serious questions about the City’s intentions .and the propriety of its procedures in preparation for the reenactment of affirmative action goals which demonstrate that the issues in this case are not moot. In light of the criticisms of Mr. Beatty’s study, the city decided to find another consultant to assist it in developing a factual predicate for affirmative action legislation. 2. MBELDEF and BBC, Inc. Council President Hammond assigned the task of finding a new consultant to council member Ben Espy, a prominent black lawyer and politician. Mr. Espy contacted the Minority Business Enterprise Legal Defense and Education Fund (“MBELDEF”), the same organization Mr. Beatty had corresponded with and confided his legal strategy to in November of 1989. MBELDEF, located in Washington, D.C., describes itself as a “national nonprofit public interest law firm and membership advocacy organization founded in 1980 by former U.S. Congressman Parren J. Mitchell (D-Md.) for the purpose of providing legal defense of class interests of minority business enterprises ...” Thus, the city chose as its second consultant a firm that was in the business of advocating the interests of minority businesses. MBELDEF was not qualified to conduct a statistical analysis of possible race and gender discrimination in city contracting and arranged for the Denver firm of Browne, Bortz & Coddington, Inc. (“BBC”) to do this part of the proposed disparity study. In May of 1991, the city accepted the MBEL-DEF/BBC proposal. 3. Beatty & Roseboro and Bradford (1991) In the meantime, Mr. Beatty had continued Ms work. According to the testimony of Council President Lazarus, he did so without the city’s knowledge or approval. Nevertheless, in January of 1991, Mr. Beatty presented the city with a pair of reports. The first, authored by his firm, was entitled “Columbus, OMo Disparity Study and Recommendation” (“Beatty Report”), and the second, which he commissioned from William D. Bradford, Ph.D., was entitled “Disparity in Public Contracting, Columbus, Ohio Economic Evidence and Recommendation” (“Bradford Report”). Although the city had decided to retain another consultant because of the issues raised eoncermng the objectivity and reliability of Mr. Beatty’s work, and even though it had not authorized him to do any further work, the city accepted the Beatty and Bradford reports and expressly relied on them when it adopted the 1993 EBO legislation. B. The Factual Predicate for the EBO Code of 1993 The disparity study commissioned from MBELDEF and BBC was completed in August of 1992 and was presented to the city in form of a report entitled “Predicate Study, City of Columbus, Ohio” (“Predicate Study” or “PS”). After receiving the Predicate Study, city council proceeded to hold public hearings on October 28 and 29 and November 18 and 19, 1992. These hearings were coordinated by MBELDEF. Thereafter, the city commissioned several additional studies from BBC, some of which were completed and received before the enactment of the EBO Code and some after. These additional reports and studies included the Predicate Study Supplement (“Predicate Study Supplement” or “PSS”) (September, 1993); the Management Study (March, 1993); the Employment Predicate Study (“Employment Study” or “ES”) (September, 1994) and the Predicate Study Second Supplement (“Predicate Study Second Supplement” or “PS 2d Supp.”) (January, 1995). When the city enacted the EBO Code of 1993, it recited its reliance inter alia on the public hearings held in January and March, 1990 and October and November, 1992, the Beatty Study, the Bradford Study, the Predicate Study, and the Predicate Study Supplement. In January of 1995, the city amended the ordinance to recite reliance on the Employment Study and the Predicate Study Second Supplement. C. Postenactment Evidence At trial, the city offered into evidence the Management Study, the Employment Study and the Predicate Study Second Supplement even though the city did not rely on them when it enacted the EBO legislation. Indeed, the last two were not in existence when the legislation was enacted. Most courts wMch have been presented with the question of the admissibility of post-enactment evidence have held that it is admissible, particularly where the plaintiffs claim, as here, is for injunctive relief. See, e.g., Concrete Works, 36 F.3d at 1521 (posten-actment evidence admissible if useful for court’s determination of whether ordinance’s deviation from norm of equal treatment was necessary); Contractors Ass’n of Eastern Pennsylvania, Inc. v. City of Philadelphia, 6 F.3d 990, 1004 (3d Cir.1993) (consideration of postenactment evidence appropriate where principal relief sought and only relief granted was injunction); Coral Construction, 941 F.2d at 920 (factual predicate for program should be evaluated based upon all evidence presented to district court, including evidence adduced after enactment). The court in Concrete Works of Colorado, Inc. v. City and County of Denver, 823 F.Supp. 821, 887 (D.Colo.1993) commented that “it would make little sense to strike down” an ordinance for lack of factual support “only to watch the City Council reconvene immediately, incorporate the new evidence into a new ordinance, and arrive at a constitutionally adequate factual predicate.” The court in Coral Construction, 941 F.2d at 920-921, reasoned that this rule would relieve municipalities presented with some evidence of discrimination of the dilemma of having to choose between waiting until further development of the record, thereby risking liability to minorities, and acting prematurely, thereby risking liability to nonminorities. The reasoning of Coral Construction would not apply to the instant case, where the city had an M/FBE set-aside program in effect for many years prior to the contested legislation which had resulted in substantial overu-tilization of MBEs. See, supra, p. 1372. In Columbus, there would appear to be little or no risk that a delay in adopting race- and gender-based preferences would involve a risk of liability to minorities. Courts have also noted potential disadvantages to using postenaetment evidence. See Contractors Ass’n of Eastern Pennsylvania, 6 F.3d at 1004 (recognizing the risk of insincerity associated with postenaetment evidence); Concrete Works, 823 F.Supp. at 837 (noting the plaintiffs opposition to consideration of postenaetment evidence based on concern that it is not possible to ensure that program is remedial if cause for' remedy is not discovered until ordinance takes effect “has considerable merit”). The admission of postenaetment evidence poses a risk of other undesirable consequences. It may encourage a government which has a strong political motivation to enact race- and gender-based preferences to proceed without an adequate factual basis, gambling that the legislation will not be challenged in court, and knowing that further efforts can be made to find a basis for the legislation while litigation is pending. The rule likewise discourages citizens who are adversely affected by such legislation from mounting a constitutional challenge even when good grounds exist, knowing that they face a moving target and that once challenged, the city may spend enormous sums to marshal evidence to support the legislation. Thus, the chilling effect of the rule may leave unchallenged race- and gender-based preferences which have no remedial justification. This court would hold the postenaetment evidence inadmissible. However, in this opinion, the court will consider all of the evidence which the city has offered in support of the legislation. VI. CITY’S PROCUREMENT PROCEDURES FOR CONSTRUCTION SERVICES The expenditure of city funds is governed by the Columbus City Charter and Chapter 329 of the Columbus City Code. All purchases of goods, materials and services are subject to competitive sealed bidding. Contracts must be awarded to the lowest responsible and responsive bidder. A responsible bidder is defined as one “who has the capability, capacity, facilities, equipment and personnel needed to fully perform the contract requirements, and the experience, integrity, reliability and credit which will assure good faith performance of the contract requirements.... ” Columbus City Code § 329.04(1). A responsive bidder is one who has submitted a bid which conforms in all material respects to the requirements set forth in the invitation to bid. Columbus City Code § 329.04(m). The individual city agency or department undertaking a construction project must prepare an invitation to bid which contains specifications and contract terms and conditions. The Division of Public Service customarily includes the following requirements in its invitation to bid: The Bidder is required to state, in detail, in the space provided below, what work of a character similar to that included in the proposed contract he has done, to give references and such other detailed information as will enable the Director of Public Service to judge of Ms responsibility, experience, skill and financial standing. Bids from Contractors inexperienced in tMs particular work will not be considered. Among other things, tMs statement shall include the following: Evidence to the effect that the Bidder maintains a permanent place of business; list of plant equipment available for the Work under the proposed contract; together with the statements as to when purchased or otherwise obtained and statements as to its present physical condition; evidence to the effect that the Bidder has a suitable financial status to meet obligations incident to the Work, and evidence to the effect that the Bidder has appropriate techmcal experience. Invitations to bid are sent to a list of construction firms selected by the agency. In some cases, firms receiving solicitations may be prequalified by the agency. All invitations to bid must be advertised in the Columbus City Bulletm which is available to anyone for a subscription fee of $30 per year. They may also be advertised in newspapers, trade journals and other appropriate publications. They are also posted in the reception area of the office of the City Purchasing Division. Bids must be submitted in writmg. When all of the bids are received, they are reviewed for responsiveness. Every bid must be accompamed by a bid bond and a performance bond of at least 10% and 50%, respectively. In practice, the city customarily requires a 100% performance bond on all contracts for public improvements. The bids are opened and publicly read at the place, date and time specified in the notice in the presence of the city auditor or his representative. Local bidders, i.e., those located withrn Franklin County, receive a credit equal to 1% of the lowest bid submitted by a non-local bidder. When the wiiming bidder has been selected, the department •then prepares legislation for approval by the city council and the mayor. Whenever a contract is awarded to any bidder other than the lowest, the director of the city agency must provide a written explanation to city council. The contract must also be reviewed and approved by the city auditor and the city attorney. No contract is effective until it is approved by an ordmance of city council. For purchases over $500 but under $10,-000, invitations to bid are posted but not advertised. Typically a city department seeking construction services on a contract under $10,000 will contact three potential vendors for quotes. The local preference credit for these purchases is 5%. Although the procedures for such contracts are simplified and do not require approval by council and the mayor, nevertheless, the contract must be awarded to the lowest responsible and responsive bidder. Biddmg on these contracts is not limited to those firms invited to bid but is open to any firm who wishes to bid. Anyone wishing to bid on such projects would have to regularly inspect the public notices posted in the offices of the Purchasing Division. Until April, 1991, advertising of invitations to bid and approval by council and the mayor was required for all contracts in excess of $5,000. The above procedures apply to prime contracts. Prime contractors themselves determine what procedures they wish to follow in awarding subcontracts. Normally, a prime contractor would privately solicit bids from subcontractors of its choice. A prime contractor may or may not require a subcontractor to furmsh a performance bond. VII. EVIDENCE OF DISCRIMINATION IN CITY CONSTRUCTION The evidence of discrimination against M/FBEs which the city relied upon in enact-mg the EBO Code included both statistical and anecdotal evidence. The investigation mcluded both city construction and the private sector of the construction industry in the Columbus MSA. The court will first analyze the statistical and anecdotal evidence of discrimination in city contracting and will then consider both kinds of evidence of discrimination in the private sector. A. Statistical Evidence of Discrimination in City Construction 1. Beatty Report Beatty & Roseboro undertook a statistical study to investigate discrimination in the award of city contracts. The Beatty Report is included in the record as Ex. D272. Beatty & Roseboro purportedly determined the percentage of total city expenditures made to MTFBEs for goods, services and construction and compared it to the percentage of eligible MTFBEs in the relevant markets. They referred to this comparison as the utilization/eligibility index. Beatty & Roseboro failed to establish that any of the M/FBEs included their definition of “eligible” were in fact qualified and able to provide construction services to the city. At page 38 of their report, Beatty & Roseboro concede that this is a problem. Instead of attempting to determine whether a firm was qualified to perform construction services for the city, they chose to define “eligible” as “any firm that is considered to be in business.” There is no basis for the assumption that all construction firms in business are capable of performing construction services for the city. Beatty & Roseboro limited their economic analysis to prime contracts. Accordingly, their list of eligible firms should have been limited to firms which were capable of qualifying as prime contractors. City ordinances require bid bonds and performance bonds on all contracts for public improvements. Clearly not every firm “in business” can meet the financial requirements to obtain such bonds. The failure to establish that “eligible” MTFBE firms were qualified to provide construction services to the city as prime contractors deprives the Beatty study of any probative value. In order to determine the total number of all available construction firms for the pirn-pose of computing utilization ratios, Beatty & Roseboro used statistics for Franklin County for the years 1969 to 1987 published in County Business Patterns (Ohio), a publication of the U.S. Department of Commerce, Bureau of the Census. Beatty & Roseboro arrived at MBE eligibility ratios for construction ranging from 5% in 1980 to 10% in 1989, and from 1% to 2% for the same years for FBEs. A rev