This section contains the nature of the case and procedural background.

Mountain Gravel and Construction was awarded a highway construction project from the Department of Transportation (DOT). It then solicited bids from subcontractors for the guardrail part of the job. Adarand (P) made the low bid. Adarand lost because of the incentives given to Gonzales Construction. Under the DOT contract, Mountain would get additional compensation if it hired subs that were certified as small businesses controlled by socially disadvantaged individuals. Gonzales was certified as just such a business. P was not. Mountain would have given the contract to P if there had been no incentive to award it to Gonzales. P claims that the Federal Government's practice of giving general contractors financial incentives to hire socially and economically disadvantaged individuals and the use of race-based presumptions in identifying those individuals violates equal protection under the Fifth Amendment's Due Process Clause. The District Court granted the Government's motion for summary judgment. The Court of Appeals affirmed. Applying the 'lenient standard,' in Metro Broadcasting, Inc. v. FCC the Court of Appeals upheld the use of subcontractor compensation clauses.

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