WASHINGTON (Reuters) – The White House on Thursday unveiled plans to ask federal agencies to spend at least 11% of contract dollars spent on disadvantaged small businesses next year, up from an average of 9.8% over the past five years.
The small increase, which would go well beyond the 5% required by law, is part of an attempt to harness the federal government’s considerable purchasing power to increase equity, the White House said.
âPresident Biden is committed to leveraging all the tools at his disposal and leveling the playing field for small and underserved businessesâ¦.
He said the federal government is the world’s largest purchaser of goods and services with $ 600 billion a year.
âThe federal government can be a powerful engine of equity and wealth creation in underserved communities,â he added, noting that the overall goal was to reach 15% by 2025.
Disadvantaged small businesses are a category under federal law for which businesses owned by blacks, Latinos and other minorities “are presumed to qualify,” the White House said.
The move comes after a recent report found that the number of new small businesses entering federal government procurement has declined by 60% over the past decade, the White House said.
(Reporting by Jeff Mason and Alexandra Alper; Editing by Leslie Adler)