Montana's Department of Transportation receives federal funds for transportation projects. As a condition of receiving the funds, Montana was required to set up a program to avoid discrimination in awarding contracts to disadvantaged business enterprises (DBEs). DBEs are businesses owned by members of historically disadvantaged groups, such as minorities. Mountain West Holding Company, Inc., installs signs, guardrails, and concrete barriers on highways in Montana and competes against DBEs for contracts. Mountain West sued the state in federal court for violating Title VII by giving preference to DBEs. At trial, the court pointed out that any classifications based on race are permissible "only if they are narrowly tailored measures that further compelling governmental interests." Montana had the burden of showing that its DBE program met this requirement. To show that the program addressed actual discrimination, the state presented a study that reported disparities in state-awarded contracts and provided anecdotal evidence of a "good old boys" network within the state's contracting industry. The district court accepted this evidence and concluded that Montana had satisfied its burden. A federal appellate court reversed, finding that the evidence was insufficient to prove a history of discrimination that would justify the preferences given to DBEs.

Note: Can you please answer this question using IRAC( Issue, Rule of Law, Analysis, and Conclusion) format. Because then it will be easy for me to understand the case a a lot better.