GOP Bill Seeks to Gut Minority and Women-Owned Business Contracting Preferences

A new legislative proposal from Sen. Mike Lee (R-Utah) and Rep. Glenn Grothman (R-Wisconsin) aims to dismantle federal contracting preferences for minority and women-owned businesses, furthering the Trump administration’s assault on diversity, equity, and inclusion (DEI) initiatives.

The bill, known as the Ending Discrimination in Government Contracting Act, would codify and expand President Trump’s March 26 executive order that bans DEI provisions in federal contracts. That executive order already requires agencies to insert clauses prohibiting DEI efforts, mandates reporting to ensure compliance, and empowers agencies to cancel contracts that violate the no-DEI rule.

Lee and Grothman’s bill goes further by eliminating contracting goals and preference programs for socially and economically disadvantaged small businesses, including the 8(a) program and those owned by women. While the bill leaves intact preferences for veteran-owned and HUBZone businesses, it explicitly forbids agencies from considering race, ethnicity, or sex when awarding contracts or grants. It also bans prime contractors from requiring their subcontractors to consider these factors.

The legislation would also repeal the Minority Business Development Act of 2021, which has directed billions in federal contracts to minority-owned businesses since its passage. Additionally, it ends requirements for agencies to report on contracts awarded to women-owned and disadvantaged businesses.

Lee and Grothman justify their bill by claiming DEI programs waste taxpayer money and are unfair. But critics see this as a blatant rollback of efforts to address systemic economic disparities and a direct attack on minority and women entrepreneurs who rely on these contracting preferences to compete in the federal marketplace.

The bill has no co-sponsors so far and has been referred to committee, but if enacted, it would reshape the landscape of federal small business contracting, stripping away critical tools that promote inclusion and equity.

This proposal is yet another example of the ongoing GOP effort to dismantle policies aimed at leveling the playing field for historically marginalized groups, under the guise of “ending discrimination.” In reality, it threatens to deepen economic inequality and undermine decades of progress toward fairness in government contracting.