BLUMENFELD, District Judge:

This is an appeal from the decision of the District Court, Werker, J., that upheld the constitutionality of section 103(f)(2) of the Public Works Employment Act of 1977 (PWEA), 42 U.S.C. § 6705(f)(2). The statute mandates that "no grant shall be made under this chapter for any local public works project unless the applicant gives satisfactory assurance to the Secretary that at least 10 per centum of the amount of each grant shall be expended for minority business enterprises." "Minority business enterprise" (MBE) is defined as "a business at least 50 per centum of which is owned by minority group members . . .." The statute defines minority group members in racial terms: "citizens of the United States who are Negroes, Spanish-speaking, Orientals, Indians, Eskimos, and Aleuts."

Appellants are several associations of contractors and subcontractors and a firm engaged in heating, ventilation and air conditioning work. Their application for a preliminary injunction on their petition for declaratory and injunctive relief to prevent the Secretary of Commerce as program administrator from enforcing the MBE provision was consolidated with a hearing on the merits. The District Court found that the provision was a constitutionally valid exercise of congressional power to remedy the effects of past discrimination in the construction industry. The District Court denied their petition and dismissed the complaint. We affirm.

I.

In 1976 Congress enacted the Local Public Works Capital Development and Investment Act of 1976, Pub.L. No. 94-369 (July 22, 1976), 90 Stat. 999-1012, 42 U.S.C. §§ 6701-6735, designed to help alleviate nationwide unemployment in the economically depressed construction industry by appropriating $2 billion for public works projects. The Secretary of Commerce was to administer the program through the Economic Development Administration (EDA), charged with distributing funds under the Act to state and local governments. Congress mandated that the program be administered expeditiously and the Secretary approved grants for the entire appropriation by February 1977. In May 1977, Congress supplemented the initial appropriation through the Public Works Employment Act of 1977, Pub.L. No. 95-28 (May 13, 1977), 91 Stat. 116-121, 42 U.S.C. §§ 6701-6736, to the extent of an additional $4 billion.

During the consideration of the PWEA on the floor of the House, the MBE requirement was introduced as an amendment to the Act. As contained in the final enactment, the provision reads:

"Except to the extent that the Secretary determines otherwise, no grant shall be made under this chapter for any local public works project unless the applicant gives satisfactory assurance to the Secretary that at least 10 per centum of the amount of each grant shall be expended for minority business enterprises. For purposes of this paragraph, the term `minority business enterprise' means a business at least 50 per centum of which is owned by minority group members or, in case of a publicly owned business, at least 51 per centum of the stock of which is owned by minority group members. For the purposes of the preceding sentence, minority group members are citizens of the United States who are Negroes, Spanish-speaking, Orientals, Indians, Eskimos and Aleuts."

The appellants' attack is aimed only at the amendment; they do not contend that the inclusion of the amendment rendered the entire statute unconstitutional.

The question presented in this appeal is a narrow one. We are called upon to decide whether Congress acted in a constitutionally permissible manner in conditioning the receipt of federal grants for local public works projects under the PWEA upon the requirement that 10 percent of the grants be allocated to minority business enterprises.

II.

At the outset we note that when Congress seeks to exercise its spending powers, it is required to distribute federal funds in a manner that neither violates the equal protection rights of any group nor continues the effects of violations that have occurred in the past, for

"`[s]imple justice requires that public funds, to which all taxpayers of all races contribute, not be spent in any fashion which encourages, entrenches, subsidizes, or results in racial discrimination.'"

Lau v. Nichols, 414 U.S. 563, 569, 94 S.Ct. 786, 789, 39 L.Ed.2d 1 (1974), quoting 110 Cong.Rec. 6543 (1964) (remarks of Sen. Humphrey, quoting from President Kennedy's message to Congress, June 19, 1963).

The Secretary acknowledges that in enacting the MBE provision Congress created an explicitly race-based condition on the receipt of PWEA funds. Under modern equal protection standards, racial classifications are "suspect." This denomination often triggers the highest level of scrutiny imposed by the courts. Loving v. Virginia, 388 U.S. 1, 11, 87 S.Ct. 1817, 18 L.Ed.2d 1010 (1967). Usually when a classification turns upon an individual's racial or ethnic background, "he is entitled to a judicial determination that the burden he is asked to bear on that basis is precisely tailored to serve a compelling governmental interest." Regents of University of California v. Bakke, ___ U.S. ___, ___, 98 S.Ct. 2733, 2753, 57 L.Ed.2d 750 (1978) (opinion of Powell, J.); In re Griffiths, 413 U.S. 717, 93 S.Ct. 2851, 37 L.Ed.2d 910 (1973). Whether rigid scrutiny is mandated whenever an act of Congress conditions the allocation of federal funds in a manner which differentiates among persons according to their race is a question we need not reach, for we are of the opinion that even under the most exacting standard of review the MBE provision passes constitutional muster.

III.

The principles which the court below applied in rejecting the appellants' contentions that the amendment was either unconstitutional or in violation of the Civil Rights Act of 1964 are not in dispute on this appeal. However, we restate them briefly in order to put the appellants' argument that they were misapplied by the trial judge into sharper focus.

The appellants agree that the district judge correctly decided that "strict scrutiny" was required, but they contend that the standard of review which such scrutiny requires was not correctly applied. Having conceded below and properly so, that "a compelling state interest is present if the racial classification is intended to remedy the vestiges of present and/or past discrimination," they advance two separate arguments that a compelling interest was not shown.

Their argument is that there was not an adequate basis for the court below to conclude that Congress' purpose was to remedy prior wrongs to minority groups who had been denied opportunities in the construction industry as a result of race discrimination. This proposition has two elements that are analytically distinct. That they are treated in combination is understandable for they are bound together and rest to some extent on the same history and policy considerations. The amendment is permissible only if it is a remedy for past discrimination. See Regents of the University of California v. Bakke, supra, ___ U.S. at ___, 98 S.Ct. 2754 (opinion of Powell, J.). Whether it was Congress' purpose to enact a remedy for past discrimination is one question. Whether such discrimination occurred in the past is another question. The second question depends upon an assessment of historical facts, the first upon what was in the mind of Congress.

A. Congress' Purpose

Congressional purpose is relevant to consideration of whether the classification is permissible. Under any equal protection test "the classification must be reasonable, not arbitrary, and must rest upon some ground of difference having a fair and substantial relation to the object of the legislation . . .." F. S. Royster Guano Co. v. Virginia, 253 U.S. 412, 415, 40 S.Ct. 560, 561, 64 L.Ed. 989 (1920). More recently in San Antonio Independent School District v. Rodriguez, 411 U.S. 1, 17, 93 S.Ct. 1278, 1288, 36 L.Ed.2d 16 (1973), the Court said that even if strict judicial scrutiny was not required, the statute "must still be examined to determine whether it rationally furthers some legitimate, articulated state purpose and . . . does not constitute an invidious discrimination in violation of the Equal Protection Clause of the Fourteenth Amendment." See also L. Tribe, American Constitutional Law § 1630 at 1083-85 (1978); Gunther, The Supreme Court, 1971 Term — Foreward: In Search of Evolving Doctrine on a Changing Court: A Model for a Newer Equal Protection, 86 Harv.L.Rev. 1, 20-22 (1972). Since strict scrutiny should require no less, we turn our attention to whether Congress articulated its purpose in enacting the amendment.

The rule for ascertaining what the purpose of Congress was in enacting a statute that is subject to scrutiny under the Equal Protection Clause is more deferential than the rule which would be applied to test a state statute. In differentiating a law passed by Congress from a mandate by a state legislature, or an administrative agency, the Court has said, "Alternatively, if the rule were expressly mandated by the Congress or the President, we might presume that any interest which might rationally be served by the rule did in fact give rise to its adoption." Hampton v. Mow Sun Wong, 426 U.S. 88, 103, 96 S.Ct. 1895, 1905, 48 L.Ed.2d 495 (1976). That a large measure of judicial restraint must be accorded to Congress in its enactment of legislation to remedy past discrimination was affirmed recently in Regents of the University of California v. Bakke, supra, ___ U.S. at ___ n. 41, 98 S.Ct. at 2755 (opinion of Powell, J.):

"[W]e are not here presented with an occasion to review legislation by Congress pursuant to its powers under § 2 of the Thirteenth Amendment and § 5 of the Fourteenth Amendment to remedy the effects of prior discrimination. Katzenbach v. Morgan, 384 U.S. 641, [86 S.Ct. 1717, 16 L.Ed.2d 828] (1966); Jones v. Alfred H. Mayer, 392 U.S. 409, [88 S.Ct. 2186, 20 L.Ed.2d 1189] (1968). We have previously recognized the special competence of Congress to make findings with respect to the effects of identified past discrimination and its discretionary authority to take appropriate remedial measures."

Judge Werker did not base his decision that it was the purpose of Congress to remedy past discrimination solely on a presumption. There is no need to rely solely on a bare presumption to determine the purpose of Congress. The classification established by the amendment is self-evident. The amendment makes no sense unless it is construed as a set-aside to benefit minority subcontractors. It has been suggested that "[i]f an objective can confidently be inferred from the provisions of the statute itself, recourse to internal legislative history and other ancillary materials is unnecessary." Note, Developments in the Law — Equal Protection, 82 Harv.L.Rev. 1065, 1077 (1969). It is also beyond dispute that the set-aside was intended to remedy past discrimination. To support that conclusion, it is "enough that [the court] perceive a basis upon which Congress might predicate a judgment that" the MBE amendment would remedy past discrimination against minority construction businesses. See Katzenbach v. Morgan, supra, 384 U.S. at 656, 86 S.Ct. 1717. In view of the comprehensive legislation which Congress has enacted during the past decade and a half for the benefit of those minorities who have been victims of past discrimination, any purpose Congress might have had other than to remedy the effects of past discrimination is difficult to imagine.

B. Past Discrimination

Although Congress' purpose and the factual background from which it sprang are not so disjoined that they could not be considered together, Judge Werker considered the question of past discrimination separately. The comprehensive opinion of the District Judge to which we make reference considered remarks made on the floor of the House when the MBE provision was introduced during the debate on the PWEA. He noted that Representative Mitchell, the amendment's sponsor, criticized the federal program of assistance to minority businesses that permits them to become "viable entities in our system" only to be "cut off" when government contracts are awarded. See Joint App. 160a; 123 Cong.Rec.H. 1437 (daily ed. Feb. 24, 1977), reprinted in Associated General Contractors v. Secretary of Commerce, 441 F.Supp. 955, 997-1006 (C.D.Cal. 1977) (Appendix C). In concluding that Congress found past discrimination, he also properly relied upon remarks made by Representative John Conyers of New York. Speaking in favor of the amendment, the Representative observed that "minority contractors and businessmen who are trying to enter in on the bidding process . . . get the `works' almost every time." Id. (emphasis added). Those remarks clearly disclosed the connection between the past discrimination and the "set-aside" amendment, and powerfully reinforced the conclusion reached by the judge.

That an explicit finding of past discrimination was not included in the committee reports may sometimes be "troublesome." Constructors Association v. Kreps, 441 F.Supp. 936, 952 (W.D.Pa. 1977), aff'd, 573 F.2d 811 (3d Cir. 1978). In this case it is not surprising in view of the manner in which the amendment was introduced. But the absence of such a finding in the reports is not determinative. The record that was considered provided sufficient justification for a finding of past discrimination. Cf. Arizona v. Washington, 434 U.S. 497, 513, 98 S.Ct. 824, 54 L.Ed.2d 717 (1978) (when record provides sufficient justification for trial judge's mistrial ruling, ruling not subject to collateral attack simply because judge failed to make explicit finding of "manifest necessity" for mistrial). The record may be sparse, but it is not entirely silent.

The judge quite properly took account of the data and observations contained in a report prepared by the Department of Commerce to evaluate existing opportunities for minority business. See U.S. Dept. of Commerce, Office of Minority Business Enterprise, Minority Business Opportunity Handbook (August 1976). Noting plaintiffs' objection to the soundness of the data contained in the report, the Judge found "even if the statistics for minority businesses were to be doubled, there would still be an ample basis for Congress to conclude that `the severe shortage of potential minority entrepreneurs with general business skills is a result of their historical exclusion from the mainstream economy.'" Joint App. 161a quoting from the Minority Handbook at 1-1-2 (court's emphasis included).

Moreover the judge undertook consideration of evidence that Congress had recorded elsewhere to support its finding that the history of discrimination was specific to the construction industry. A report prepared by the House Subcommittee on Small Business Administration Oversight and Minority Business Enterprise contains the following statement:

"The very basic problem . . . is that, over the years, there has developed a business system which has traditionally excluded measurable minority participation. In the past more than the present, this system of conducting business transactions overtly precluded minority input. Currently, we more often encounter a business system which is racially neutral on its face, but because of past overt social and economic discrimination is presently operating, in effect, to perpetuate these past inequities. Minorities, until recently have not participated to any measurable extent, in our total business system generally, or in the construction industry, in particular. However, inroads are now being made and minority contractors are attempting to `break-into' a mode of doing things, a system, with which they are empirically unfamiliar and which is historically unfamiliar with them."

Summary of Activities of the Committee on Small Business, House of Representatives, 94th Congress, at 182-83 (November 1976) (emphasis added). The judge's finding that Congress acted upon sufficient evidence of past discrimination is more than amply supported by the record and establishes a "perceived" basis for congressional action.

IV.

In employment discrimination cases it is well established that the government's interest in overcoming the disadvantages resulting from past discrimination in employment on account of race is sufficiently compelling to justify a remedy which requires the use of racial preferences. The vitality of the rationale in those cases was not disturbed by the recent decision of the Court in Regents of the University of California v. Bakke, supra. The Justices did not disagree with the principle that race-conscious remedies can be imposed when there have been judicial, legislative or administrative findings of past discrimination and the remedies fashioned are appropriately drawn to rectify that discrimination. Id., ___ U.S. at ___ n. 41, 98 S.Ct. 2755 (opinion of Powell, J.).

In affirmative action programs to remedy the effects of past discrimination the effect of preferring members of the injured groups at the expense of others must be considered. In Franks v. Bowman Transportation Co., 424 U.S. 747, 96 S.Ct. 1251, 47 L.Ed.2d 444 (1976), Mr. Justice Powell, at 784-86, 96 S.Ct. 1251 (concurring dissenting), warned that affirmative action ordered as equitable relief must not exceed the bounds of fundamental fairness. See Acha v. Beame, 531 F.2d 648 (2d Cir. 1976). It is established that in fashioning remedies for past discrimination courts must be sensitive to interests which may be adversely affected by the remedy. The courts, here, as in a number of other areas where legislation for which there is a compelling interest collides with constitutional principles, have adopted an ad hoc balancing test which examines each particular case, e. g. Branzburg v. Hayes, 408 U.S. 665, 92 S.Ct. 2646, 33 L.Ed.2d 626 (1972) (public interest in law enforcement outweighs reporters' first and fourteenth amendment interest in keeping news sources confidential). One of the significant limitations on a remedy of "reverse discrimination" for past discrimination is that its effects shall "not be `identifiable,' that is to say, concentrated upon a relatively small, ascertainable group of non-minority persons." EEOC v. Local 638 . . . Local 28, Sheet Metal Workers, 532 F.2d 821, 828 (2d Cir. 1976). See also Kirkland v. New York State Department of Correctional Services, 520 F.2d 420, 427 (2d Cir. 1975), cert. denied, 429 U.S. 823, 97 S.Ct. 73, 50 L.Ed.2d 84 (1976). The amendment at issue falls well within such a boundary against inequitable results. The PWEA which added $4 billion to the $200 million not yet expended portion of the amount authorized by Round I (Local Public Works Act) amounted to about 2.5 percent of the total of nearly $170 billion spent on construction in the United States for 1977, according to Department of Commerce statistics. The set-aside for minority contractors under the PWEA was for 10 percent of the total grant and thus extends to only .25 percent of funds expended yearly on construction work in the United States. The extent to which the reasonable expectations of these appellants, who are part of that industry, may have been frustrated is minimal. Furthermore, since according to 1972 census figures minority-owned businesses amount to only 4.3 percent of the total number of firms in the construction industry, the burden of being dispreferred in .25 percent of the opportunities in the construction industry was thinly spread among nonminority businesses comprising 96 percent of the industry. Considering that nonminority businesses have benefited in the past by not having to compete against minority businesses, it is not inequitable to exclude them from competing for this relatively small amount of business for the short time that the program has to run.

Ours is not the only circuit in which the MBE amendment's constitutionality has been challenged by associations of general contractors. Other cases that have denied preliminary injunctions against enforcement of the "set-aside" provision are Rhode Island Chapter, Associated General Contractors v. Kreps, No. 77-0676 (D.R.I. Feb. 6, 1978); Associated General Contractors v. Secretary of Commerce, No. 77-4218 (D.Kan. Dec. 19, 1977); Carolinas Branch, Associated General Contractors v. Kreps, 442 F.Supp. 392 (D.S.C. 1977); Ohio Contractors Association v. Economic Development Administration, 452 F.Supp. 1013 (S.D.Ohio 1977); Montana Contractors Association v. Secretary of Commerce, 439 F.Supp. 1331 (D.Mont. 1977); Florida East Coast Chapter v. Secretary of Commerce, No. 77-8351 (S.D.Fla. Nov. 3, 1977). But see Associated General Contractors v. Secretary of Commerce, 441 F.Supp. 955 (C.D.Cal. 1977), vacated and remanded, ___ U.S. ___, 98 S.Ct. 3132, 57 L.Ed.2d 1153 (1978), which held the provision invalid. That case reached the Supreme Court where it was remanded to the District Court for consideration of mootness. See also Wright Farms Construction, Inc. v. Kreps, 444 F.Supp. 1023 (D.Vt. 1977).

Both the Third and the Sixth Circuits have upheld the constitutionality of the MBE amendment. Constructors Association v. Kreps, 573 F.2d 811 (3d Cir. 1978); Ohio Contractors Association v. Economic Development Administration, 580 F.2d 213 (6th Cir. 1978). We agree with their decisions that section 103(f)(2) of the Public Works Employment Act of 1977, 42 U.S.C. § 6705(f)(2), is not unconstitutional.

The judgment is affirmed.