DOGE committee is eyeing federal diversity programs, mostly minority set asides for federal contracts. I think there may be some savings as the contracts are open to a wider pool of competition, but this is mostly about ending race and probably gender based favoritism. I approve of ending the racially biased contracting. I don't think they should end empowerment zones.
DOGE, which is not actually a government department, wants to cut up to $2 trillion in annual spending
www.the-independent.com
It’s about DEI not budget savings.
The end of support for women and minority owned businesses in government contracting was very much intended as a response to actual racial and gender bias in government contracting decisions. Is it still necessary? My guess is that among the folks implementing the change in the incoming administration, the result will just be to return to good old days racial and gender bias in contracting decisions and call that neutral/fair.
But maybe the decades of actively giving women and minority owned businesses a shot has had time to build enough businesses that the program is not needed anymore. Unfortunately I don’t trust the Trump Admin to conduct an honest test of such a proposition. But I guess we will find out.
I very much doubt that ending such programs will create any meaningful cost savings by creating some larger pool of contractors though. In most cases, the minority/gender support only kicks in if there are multiple contract bids that are competitive.
But there are small business set-asides for licensed minority and women owned companies certified by SBA — accounting for 5% of government contracts available to small businesses (which excludes most big ticket stuff, like Military and law enforcement equipment). SBA 8a contracting opportunities aren’t just based on race and gender, though, they support small businesses owned by any person facing social disadvantages or disabilities.
The Federal Government also requires that 23% of all government contracts go to small businesses, btw, and the 5% set-aside is a subset of the 23% (so, if there are 100 government contracts that year, 23 of them must go to small business and then 5% of the 23 small business set aside contracts (so one of them) must go to certified minority owned businesses. The competition for those set asides IS pretty low because there are relatively few businesses so certified by the SBA and they span across a lot of services and service areas.
The most successful 8a small business are the ones that develop relationships with large government contractors who include the 8a business as a subcontractor to demonstrate that the big contract also helps satisfy government policy to support disadvantaged business. The prime contractor does most of the government contractor heavy lifting on the bid process and the disadvantaged business gets a shot to go along for the ride as a subcontractor.
