A Granular Examination of Gender and Racial Disparities in Federal Procurement

11 Pages Posted: 18 Feb 2024

See all articles by Chris Parker

Chris Parker

University of Virginia - Darden School of Business; American University - Kogod School of Business

Dwaipayan Roy

University of Virginia - Darden School of Business

Date Written: January 20, 2024

Abstract

The US federal government annually awards billions of dollars as contracts to procure different products and services from external businesses. Although the federal government's immense purchasing power provides a unique opportunity to invest in the nation's women-owned businesses (WOBs) and minority-owned businesses (MOBs) and advance the entrepreneurial dreams of many more Americans, gender and racial disparities in federal procurement are pervasive. In this study, we undertake a granular examination of these disparities by analyzing data on 1,551,610 contracts awarded by 58 different federal government agencies. Specifically, we examine the representation of WOBs and MOBs in contracts with varying levels of STEM intensity and across 19 different contract categories, which capture the wide array of products and services purchased by the federal government. We show that contracts with higher levels of STEM intensity are associated with a lower likelihood of being awarded to WOBs and MOBs. Interestingly, the negative association between a contract's STEM intensity and its likelihood to be awarded to MOBs is particularly salient for Black-, and Hispanic-owned businesses. Among the 19 categories of contracts, Black-owned businesses are more likely to receive contracts that are characterized by lower median pay levels. Collectively, these results provide data-driven evidence demonstrating the need to make a distinction between the different categories of MOBs and consider the type of products and services being procured while carrying out an examination of racial disparities in federal procurement.

Keywords: Public Procurement, STEM, Supplier Diversity, Federal Contracts

Suggested Citation

Parker, Chris and Roy, Dwaipayan, A Granular Examination of Gender and Racial Disparities in Federal Procurement (January 20, 2024). Darden Business School Working Paper, Available at SSRN: https://ssrn.com/abstract=4714527 or http://dx.doi.org/10.2139/ssrn.4714527

Chris Parker

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

American University - Kogod School of Business ( email )

4400 Massachusetts Avenue NW
Washington, DC 20816-8044
United States

Dwaipayan Roy (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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