1. It is ethical for the local administration to use this as a qualification in their award because being straight is necessary for the mankind to carry on. Reproduction is very important in this capitalized world. It is right to disqualify those who are incapable of reproducing. If they cannot do so, they are almost useless.
2. It is not ethical for the local administration to use this as a qualification in their award because this is 2014 and everyone should have equal rights regardless of their sex, age, race, or social status. They are being sexist. The gay are as good as any other sex. Sexual orientation has nothing to do with the outstandingness of a person.
3. Do you think it is acceptable for the local administration to include this condition?
It is acceptable for them to do this. However, they should not state it that clearly. They should just cut off the gay candidates quietly as it is obvious that it’s going to be controversial.