Social Equity in Federal Contracting During Emergencies: A Portfolio Management Perspective

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While the U.S. federal government strives to advance social equity in government contracting through various policies to support small disadvantaged business enterprises (SDBEs), entry barriers persist. Drawing on federal government spending data from the initial response to the COVID-19 pandemic, this study estimates logistic and multinomial logistic regressions using portfolio management theory to understand what factors can favor SDBE participation in government contracts during the immediate response to emergencies and whether these factors differ when governments award strategic versus non-strategic contracts. The results show that governments do not necessarily have to reduce competition to favor SDBE participation in government contracts, as some of these suppliers can participate and win competitive procedures. Although non-SDBE suppliers were still more likely to be awarded contracts during the initial emergency response, SDBE suppliers were more likely to win procedures for strategic and important supplies.