The Case for Federal Programs That Help Small and Diverse Suppliers
Briefly

President Trump signed an executive order to eliminate diversity, equity, and inclusion (DEI) programs in federal contracting, citing them as inefficiencies that harm government performance. However, a recent study presents evidence contradicting this perspective, revealing that federal set-aside contracts for small and diverse suppliers outperformed open competition contracts. These initiatives resulted in fewer cost overruns and quicker project timelines, cementing the necessity for large corporations to enhance their procurement processes with diverse suppliers. The findings indicate that DEI initiatives may actually bolster federal procurement efficiency, challenging the underlying rationale of the executive order.
The study found that small and diverse suppliers perform better when awarded contracts through set-aside programs, exhibiting lower cost overruns and shorter delays.
President Trump’s executive order aims to dismantle DEI initiatives, labeling them as public waste that hinders government performance in federal contracting.
Read at Harvard Business Review
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