In this Supreme Court case, the Court applied the standards propagated in City of Richmond v. Croson to the federal government, ruling that all racial classifications imposed by whatever federal, state, or local governmental actor must be analyzed by the reviewing court under strict scrutiny. The Court overturned a decision dismissing a suit brought by a contractor challenging the constitutionality of a federal program designed to provide highway contracts to minority business enterprises.

The results in Adarand confirmed the conservative direction in which the Supreme Court moved with respect to affirmative action plans. It seemed clear after this decision that affirmative action plans would only survive court challenges by being narrowly tailored to rectify past discrimination.