Black-Owned Businesses are Getting Shafted on Federal Contracts for Goods and Services

By: Donald V. Watkins

Copyrighted and Published on October 29, 2024

An Editorial Opinion

In the world and journalism, we are trained to follow the money.  When I followed the money spent on federal contracts for goods and services in fiscal years (FY) 2021, 2022, and 2023, I was stunned at what I found.  Black-owned businesses are getting royally shafted in the award of these federal contracts.

The fiscal data for each of these years is published by the U.S. Department of the Treasury and Small Business Administration.

I also learned that approximately 27% of all federal contracts awarded during this period were non-bid contracts.  Yet, Black-owned business participation in these non-bid contracts was almost non-existent.

Blacks Constitute 14.6% of the U.S. Population and Contribute 7-8% to the Total Federal Revenue

In 2024, the Black population in the United States is estimated to be approximately 48.8 million, representing about 14.6% of the nation's population. 

Economists estimate that Black Americans contribute around 5-6% of federal income tax revenue.  Black Americans also contribute around 8-9% of federal payroll tax revenue. Combining income and payroll taxes, along with smaller sources like excise taxes, Black Americans contribute about 7-8% to the total federal revenue.

Federal Spending with Qualified, Capable, Eligible, and Properly Registered Black-Owned Businesses is Shockingly Low

Even though Black Americans contributed 7-8% to the federal government’s total revenue in FY 2021, 2022, and 2023, on average, Black-owned businesses received only 1.6% of all federal contracting dollars for goods and services during this period.  

In FY 2021, the U.S. federal government spent approximately $6.82 trillion. Of this total, about $560 billlion was spent on the procurement of goods and services. Of this amount, Black-owned businesses received only 1.6% (or $9 billion) in federal contracts, even though Black businesses made up 12% of the qualified, capable, eligible, and registered businesses for such contracts.

In FY 2022, the U.S. federal government spent approximately $6.75 trillion. Of this total, about $637 billion was spent on the procurement of goods and services. Of this amount, Black-owned businesses received only 1.55% (or $9.5 billion) in federal contracts.

In FY 2023, the U.S. federal government spent approximately $6.13 trillion. Of this total, about $759 billion was spent on the procurement of goods and services. Of this amount, Black owned businesses received only 1.61% (or $10.2 billlion) in federal contracts.

The spending numbers for FY 2024 are not yet available.

The amount of non-bid federal contracts awarded to Black-owned businesses during this period was too insignificant and immaterial to be disaggregated in the federal procurement database.

Have Qualified, Capable, Eligible, and Properly Registered Black Businesses Been Shafted by the Federal Government?

Whenever a financial stakeholder group (a) contributes 7-8% to the total federal government revenue and (b) constitutes 12% of the qualified, capable, eligible, and properly registered vendors for goods and services needed by the federal government, but (c) gets awarded only 1.6% of the contracts to supply these goods and services, that group has been royally shafted.  In street language, that group got "fu*ked."

This outcome is particularly egregious in a federal government procurement system where 27% of the contracts for goods and services are awarded on a non-bid basis.

Who in Washington represents the political and business interests of qualified, capable, eligible, and properly registered Black-owned businesses that are seeking federal contracts for goods and services?  

The Congressional Black Caucus (CBC)? No.  Members of the CBC are too busy representing the political interests of Israeli Prime Minister Benjamin Netanyahu and Jewsih political action committees like AIPAC.   

The Joe Biden White House?  No.  President Biden has been consumed with hiding his deteriorating senility and supporting son Hunter Biden throughout his two federal criminal cases. 

The U.S. Supreme Court? Definitely not.  The current right-wing Court is proudly marching toward a triumphant return to the dreadful days of Dred Scott v. Sandford. 

The Republican Party? No.  Unfortunately, Project 2025 mischaracterizes the lawful participation of qualified, capable, eligible, and properly registered Black-owned business in the federal procurement process as a reprehensible form of Diversity, Equity, and Inclusion.

The Democratic Party? No. The Party has (a) shied away from discussing the ergregious nature and scope of the disparate treatment in federal contracting with a divided public and (b) been timid about implementing a meaningful plan of action to correct it.

The published contracting numbers tell the story here.  The numbers speak for themselves.  Skin color continues to be a major factor in determining “winners” and “losers” in the award of federal contracting dollars.

It is abundantly clear to me that nobody in Washington adequately and forcefully represents the interests of qualified, capable, eligible, and properly registered Black-owned businesses in the award of federal contracts.

Targeted intervention, if any, by the Biden White House and members of the President's Cabinet to correct, minimize, and/or erase the racial disparity between qualified and capable Black-owned and White-owned businesses in the award of federal government contracts has been too little, too late.