Biden's equity review will likely touch small business contracts

Among the raft of executive orders President Biden has signed in his first days in office is one that has the potential to revamp small business contracting.

On day one in office, Biden signed the “Executive Order on Advancing Racial Equity and Support for Underserved Communities Through the Federal Government.” The order rescinds President Trump’s EO 13950 that banned certain anti-bias and discrimination training.

But Biden's order does more than just the ban. It also calls for agencies to conduct an “equity assessment,” which includes looking at barriers underserved communities and individuals face when accessing federal benefits and programs.

This includes barriers to “agency procurement and contracting opportunities.”

The reviews will determine if new policies or regulations are needed along with additional guidance.

The order also states that government contracting and procurement opportunities “should be available on an equal basis to all eligible providers of goods and services.”

To make sure this is being done, the order gives agencies a year to report to the Office of Management and Budget and Domestic Policy Council any barriers that may exist and how they can be mitigated.

The order also calls for the creation of an Equitable Data Working Group that will address the disparity among agency data sets that makes it difficult to collect uniform data on race, ethnicity, gender, disability, income and other key demographic information.

The data can be used to create new policies and set goals.

The impact of the EO isn’t clear right now but it’s obvious it’ll touch on a variety of procurement programs. While the term "Small Business" doesn’t appear in the order, the most likely programs that can move the needle for minority participation are government contracting goals.

This potentially will impact traditional small business programs such as the 8(a), woman-owned and HUBzone contracting programs, but could also lead to more requirements and goals for subcontracting under full-and-open contracts.

I’m a little surprised that the deadline is one year and not sooner. But I take that a positive because the later deadline should mean that the quality of the information that comes back will be higher quality.

But it does look like federal contracting will be a tool the Biden administration will use to promote more equity.

We’ll track to see how this rolls out. While it’s a worthwhile goal, there also could be unintended consequences.