Top Contracting Group Advises Biden Administration on Advancing Equity

The federal government can better advance equity through contracting and procurement by reviewing its metrics and data for small and disadvantaged businesses, says a large trade association. 

The Professional Services Council, which represents over 400 companies that contract with the federal government, submitted comments this week in response to the Office of Management and Budget’s request for information about advancing equity and supporting underserved communities through the power of the federal government. The RFI advances an executive order from President Biden, and has a section specifically on contracting and procurement. It asks about how agencies can balance competing interests in their procurement, what they can do to detect inequities among their subcontractors and what type of data they should be collecting to assess equity in their procurement practices, among other questions. 

“We commend the Biden-Harris administration for prioritizing social justice issues, including but not limited to diversity, equity and inclusion, within its Build Back Better agenda,” wrote Stephanie Kostro, PSC executive vice president, in the comments submitted on July 6. “Procurement and contracting have great potential to address equity for currently and historically underserved individuals and communities and can serve as a method of accountability,” which the administration has already signaled through its budget request and other forums.

The trade association stressed that it’s essential the federal agencies “develop clearly communicated, commonly understood goals and a data-driven baseline for measuring effectiveness going forward.” 

As the administration works to increase contracting opportunities for small, disadvantaged businesses, “it will be important to review clarity of definitions and goals, even as the acquisition community incorporates any necessary modifications to or prioritizations among preference programs,” wrote Kostro. There are various governmentwide and individual agency goals for awarding contracts to small businesses overall and specific types of small businesses, such as women-owned and small disadvantaged firms. 

Such a review should look at “the effectiveness of meeting small business goals by measuring predominantly prime contract dollars versus alternative methods such as the number of businesses participating in the federal marketplace, job opportunities that result from small business and set-aside programs, and/or additional subcontracting requirements,” PSC advised. 

Next, the contracting community has a good idea about how much federal money goes to each type of business and how that compares to the contracting goals; however, it has minimal data on programs’ performance and reach, Kosto said. 

For example, “if an organization is owned or controlled by at least 51% by socially and economically disadvantaged individuals, how many underserved individuals are employees or contractors and benefit from a particular contract award?” Therefore, PSC recommended that agencies start identifying and saving data on who exactly is performing this work, which they can do by leveraging current data collection methods. 

Lastly, PSC recommended that agencies look at the type of work they are giving to small and disadvantaged businesses because “if there is no upward mobility within a given field, increasing contract dollars may perpetuate or even exacerbate a socio-economic disparity that runs counter to the intent of the administration’s efforts.” 

July 6 was the deadline for comments, and OMB received 529. Other related groups that submitted feedback were the HUBZone (Historically Under-utilized Business Zones) Contractors National Council, Native American Contractors Association and the Procurement Roundtable.