S4390-119

What This Bill Does

The Ending Discrimination in Government Contracting Act rewrites a large set of federal contracting and award laws to remove preferences, goals, reporting categories, programs, and terminology tied to socially and economically disadvantaged businesses, women-owned small businesses, race, ethnicity, and sex. It amends the Small Business Act to repeal or delete many provisions involving disadvantaged-business and women-owned business contracting, including parts of section 8(a), subcontracting goals, small-business reporting, mentor-protege and assistance language, and penalties or definitions tied to those categories. It leaves or retains several categories such as small businesses generally, qualified HUBZone small business concerns, and veteran-owned or service-disabled veteran-owned small businesses. It also removes similar preference or reporting provisions from the American Rescue Plan Act, the Consolidated Appropriations Act of 2005, the Federal Acquisition Streamlining Act, the Minority Business Development Act of 2021, the Small Business Investment Act, the American Recovery and Reinvestment Act, the CARES Act, the Energy Policy Acts, the Export-Import Bank Act, the Small Business Jobs Act, and title 51.

The bill reduces certain Department of Transportation airport financial assistance participation goals from 10 percent to 5 percent and removes references to socially and economically disadvantaged businesses, shifting references toward small business concerns and qualified HUBZone small business concerns. It also amends title 41 and repeals an Energy Policy Act provision to remove goals or reporting involving women-owned businesses and socially or economically disadvantaged businesses. Finally, it creates new title 41 and title 10 prohibitions. Heads of executive agencies and defense agencies may not consider the race, ethnicity, or sex of people who own, control, or manage businesses or other entities when granting contracts or awards, and may not require or encourage contractors or grantees to consider race, ethnicity, or sex in contracts, subcontracts, or awards. Agencies with rules or regulations requiring or encouraging those considerations must submit proposed rulemakings within 60 days and complete rulemaking within 180 days; agencies with guidance, directives, or notices must issue replacements removing those references within 60 days.

Who Benefits and How

Small businesses that do not qualify for race-, ethnicity-, sex-, women-owned, or disadvantaged-business preference categories benefit because the bill removes set-asides, goals, and reporting structures that previously steered some contracts, subcontracts, grants, technical assistance, or program priority to those categories. Qualified HUBZone small business concerns and veteran-owned small businesses benefit relative to removed categories because many amended provisions continue to name HUBZone or veteran-owned businesses while deleting women-owned and disadvantaged-business references. Prime contractors and grantees that were required or encouraged to consider race, ethnicity, or sex in subcontracting or award decisions benefit from reduced compliance obligations after the new prohibitions take effect.

Who Bears the Burden and How

Socially and economically disadvantaged small businesses, women-owned small businesses, 8(a) program participants, disadvantaged business enterprises in transportation programs, minority business development clients, and similar firms bear the main burden because the bill removes many federal contracting, lending, grant, reporting, technical assistance, and program priority provisions that were designed around those categories. The Minority Business Development Agency's statutory program authority is repealed through repeal of the Minority Business Development Act of 2021. Federal contracting offices, DOT/FAA program staff, SBA administrators, Export-Import Bank staff, defense procurement offices, and executive agency rulemaking offices bear implementation burdens because they must revise statutes, regulations, guidance, reporting categories, goals, and award procedures. Agency procurement staff may also lose data and tools previously used to track contract participation by women-owned and disadvantaged businesses.

Key Provisions

• Repeals or deletes Small Business Act preferences, reporting, goals, and assistance provisions for socially and economically disadvantaged businesses and women-owned small businesses, including major changes to section 8(a), subcontracting goals, and small-business reporting.
• Removes women-owned and disadvantaged-business preference language from programs such as American Rescue Plan relief, the CARES Act, the Export-Import Bank Act, the Small Business Jobs Act, Energy Policy Act programs, and title 51.
• Reduces certain DOT airport financial assistance participation goals from 10 percent to 5 percent and shifts airport contracting references away from disadvantaged business categories toward small business and qualified HUBZone small business concerns.
• Amends title 41 and repeals an Energy Policy Act provision to remove women-owned and socially or economically disadvantaged business goals or reporting in other government programs.
• Prohibits executive agencies from considering race, ethnicity, or sex when granting contracts or awards and from requiring or encouraging contractors or grantees to consider those traits in contracts, subcontracts, or awards.
• Creates a parallel defense contracting prohibition in title 10 and requires agencies to propose rule changes within 60 days, finish rulemaking within 180 days, and replace guidance, directives, or notices that require or encourage race-, ethnicity-, or sex-based consideration.