Executive Order to Increase Use of Federal Race Preferences

On February 16, 2023, President Biden signed an executive order that will create a “racial equity” bureaucracy in the federal government and increase the government’s use of race preferences in federal programs. Among its many prescriptions, the order calls for an increase in “the share of federal contracting dollars awarded to small disadvantaged business (SDBs) by 50 percent by 2025.” The order furthers the administration’s effort to “embed equity into all aspects of Federal decision-making.”  Racial equity is a progressive euphemism for racial reparations and preferences in education, hiring, and contracting.  

The main mechanism the federal government uses to set aside contracts for small businesses is the Section 8(a) program.  Under Section 8(a), the Small Business Administration can authorize federal agencies to set-aside government contracts to “small disadvantaged businesses.”  The regulations implementing the law define the term “small disadvantaged businesses” almost entirely on the basis of the owner’s race. 

CIR is challenging Section 8(a) regulations in Ultima Services v. USDA, which for decades has allowed the federal government to award contracts on the basis of race. The Biden administration’s use of the Section 8(a) program demonstrates that its persistent efforts to embed “racial equity” into the federal government raises significant constitutional issues.