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White House Outlines Reforms to Improve Equity and Opportunities for Underserved Small Businesses

  • White House announces several reforms aimed at increasing federal procurement from small disadvantaged businesses
  • Initiatives build on goal announced earlier this year to boost contracts to these businesses by 50 percent, to represent 15 percent of all federal contracts by 2025
  • Actions include directing agencies to increase their own contracting goals, more open data, and changes to the federal government’s use of category management

Summary by Dirk Langeveld

The Biden administration has announced a variety of reforms designed to support its goal of increasing the federal government’s procurement from small disadvantaged businesses.

The White House is looking to grow the share of contracts going to small disadvantaged businesses by 50 percent by 2025, bringing them from their average of 9.8 percent over the past five years to 15 percent of all contracts. The administration also notes how less than 5 percent of federal contracts go to women-owned small businesses, even though they make up one-fifth of the overall small business economy.

The goal of the initiative is to help support entrepreneurs while also narrowing race-based wealth disparities. The White House projects that increasing procurement will result in an additional $100 billion in income for small disadvantaged businesses over the next five years.

The reforms include:

  • Requesting that agencies increase their own goals to boost awards to small disadvantaged businesses to 11 percent for the 2022 fiscal year
  • Releasing data on federal contracting by the race and ethnicity of the business owner
  • Changes to the federal government use of category management to increase contracting opportunities for small disadvantaged businesses
  • Increasing new entrants participating in federal contracting and reversing the decline in small business suppliers
  • Adopting new management practices

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