Ending Discrimination in Government Contracting Act Proposes to Eliminate Preferences for 8(a) and WOSB Firms

On April 27, 2026, Senator Mike Lee (R-UT) and Congressman Glenn Grothman (R-WI) introduced companion bills called “Ending Discrimination in Government Contracting Act.” The bills (H.R. 8511) and (S. 4390) seek to eliminate federal contracting preferences for “socially and economically disadvantaged individuals” and “small business concerns owned and controlled by women,” essentially gutting the statutory bases for the Small Business Administration’s Woman-Owned Small Business (WOSB) and 8(a) Business Development Program (the 8(a) Program). Following President Trump’s March 26, 2026, Executive Order titled “Addressing DEI Discrimination by Federal Contractors,” these two bills are the latest efforts to remove contracting preferences based on race, ethnicity, and sex. Both bills have been referred to committee and are currently under review. Government contractors should monitor these developments closely and consider contacting their Members of Congress if they wish to advocate for these small business programs. 

Proposed Legislation Prohibits Consideration of Race, Ethnicity, or Sex in Government Contracting 

The House and Senate bills would amend several federal statutes, including the Small Business Act, the American Rescue Plan Act of 2021, and the Minority Business Development Act of 2021. Most significantly, the bills propose removing all references to “small business concerns owned and controlled by socially and economically disadvantaged individuals and small business concerns owned and controlled by women” from the Small Business Act. In practical terms, the proposed amendments would effectively dismantle the statutory foundation for the WOSB and 8(a) Programs from the small business regulations and the Federal Acquisition Regulations. Further, the bills seek to:

• Eliminate contracting preferences and priority designations for small businesses owned and controlled by socially and economically disadvantaged individuals and by women.

• Prohibit agencies from taking into consideration the race, ethnicity, or sex of individuals owning, controlling, or managing businesses or other entities when granting contracts or awards.

• Eliminate statutory contracting goals for women-owned and socially and economically disadvantaged small businesses (SDBs), which are currently set at 5% of the total value of all federal prime and subcontracts for both WOSBs and SDBs, respectively.

• Remove agency obligations to track and report contracting dollars awarded to those businesses.
  

The bills would do more than eliminate prime contracting opportunities for WOSBs and 8(a) firms. If the bills become law, they would, among other things, bar procuring agencies from directing prime contractors to apply such considerations at the subcontract level. Notably, the bills do not do away with any preferences for Historically Underutilized Business Zone (HUBZone) firms, Veteran-Owned Small Businesses (VOSBs), or Service-Disabled Veteran-Owned Small Businesses (SDVOSBs); those contracting goals and set-aside requirements would remain unchanged.

Other Proposed Statutory Changes

The bills propose to make changes to the following statutes and agency programs:

• Minority Business Development Act of 2021: Completely repeal the statute providing the current legislative framework for the Minority Business Development Agency (MBDA).

• American Rescue Plan Act of 2021: Remove the requirement to prioritize grants to small business concerns owned and controlled by women and SDBs.

• Coronavirus Aid, Relief, and Economic Security (CARES) Act: Removes the MBDA’s authority and funding to engage in pandemic-relief activities.

• Federal Acquisition Streamlining Act of 1994: Remove the Director of the Minority Business Development Agency from the “Small Business Procurement Advisory Council.”

• Small Business Jobs Act of 2010: Remove the requirement to allocate funds to states to support and incentivize women-owned and economically disadvantaged small businesses under the State Small Business Credit Initiative.

• Department of Transportation Grants: Remove preferences for small businesses owned and controlled by socially and economically disadvantaged individuals and reduce the small business participation goal for airport improvement project grants from 10% to 5%.

• NASA Contracting Goals: Repeal the requirement for NASA to establish a goal of at least 8% of the total value of all prime and subcontracts awarded by the agency to small business concerns or other organizations owned or controlled by socially and economically disadvantaged individuals.
  

Takeaways

• The bills are a direct attack on the statutory underpinnings of the 8(a) and WOSB Programs. If the bills become law, WOSBs and 8(a) firms will lose opportunities to compete for set-asides and receive sole source awards. As these firms have been historically underrepresented in the government contracting space due to hurdles they face breaking into the market, many are likely to go out of business making their underrepresentation even more acute. Having two less programs through which procuring agencies have traditionally set aside work to quickly and efficiently award contracts to qualified firms, securing those services is likely to become more challenging. With formerly eligible WOSBs and 8(a) firms having no option but to pursue small business set asides, the number of firms competing for that work is certain to increase. This may lead many to not only offer unreasonably low prices and inferior services but also increase the likelihood of protest and prolong procurements.

• The impact of the bills goes beyond the SBA programs and has far-reaching effects on federal award decisions, including sole source awards, and grants. The legislation seeks to bar all federal agencies from considering race, ethnicity, or sex in their procurement and grant-making decisions. Moreover, agencies will be barred from directing prime contractors to apply these preferences at the subcontract level.

• Preferences are preserved for VOSB, SDVOSB, and HUBZone firms. These firms may benefit from increased set-aside opportunities and grant preferences. WOSBs and 8(a) participants need to consider whether participation in these other programs is possible or plan for future teaming and joint venture opportunities with such concerns.

• Contact your representatives in Congress. Although these bills are far from becoming law, those in the government contracting community who recognize the benefits of these programs as participants or teaming partners of such firms should voice their concerns regarding the public policy and real-life implications of these efforts on their businesses. WOSBs and 8(a) participants should closely monitor S. 4390 and H.R. 8511 and contact their representatives in Congress to ensure that they can continue to effectively compete in the federal marketplace. PilieroMazza will continue to track the bills’ progress and report on any developments.
  

PilieroMazza can assist with drafting or reviewing your letters to your Congressional representatives. If you have any questions related to the bills, the WOSB Program, the 8(a) Program, or other small business government contracting matters, please contact Tony Franco, Emily Reid, Krissy Crallé, or another member of PilieroMazza’s Government Contracts Group.