White House leverages procurement authority to address racial wealth gap

President Biden delivers remarks at a commemoration of the 100th anniversary of the Tulsa Race Massacre in Tulsa, Okla.

The Biden administration is hoping to steer $100 billion in federal contracting opportunities to small, disadvantaged businesses over the next five years in an effort to narrow economic divides in the United States.

That figure represents a 50% increase in set-asides for Black-owned, Latino-owned and other minority-owned businesses included under the category of small disadvantaged businesses (SDBs).

An estimated 10.29% ($51.6 billion) of total eligible government contracting dollars went to small disadvantaged firms in 2019, the year with the latest available data from the Small Business Administration.

President Joe Biden announced the plans in a June 1 speech in Tulsa, Okla., at an event commemorating the 100-year anniversary of the Tulsa race massacre, in which mobs of white Americans burned down the Greenwood district, known at the time as "Black Wall Street."

"I'm going to increase the share of the dollars the federal government spends [on] small, disadvantaged businesses, including Black and brown small businesses, Biden said. "Right now, it calls for 10%; I’m going to move that to 15% of every dollar spent…. I have the authority to do that."

According to a White House fact sheet, hitting this goal will mean the largest increase in SBD contracting outlays since the government started collecting this data 30 years ago.

The plans additionally feature a $31 billion program to provide various forms of assistance for socially and economically disadvantaged business owners seeking partnership opportunities with the federal government and an initiative dedicated to rooting out discrimination in U.S. housing policies.

The racial wealth gap cited by the White House is stark. According to administration data, the median Black family in the United States has 13 cents for every dollar in wealth owned by white families.