Senator Mike Lee (R-UT) introduced S. 4390, the Ending Discrimination in Government Contracting Act, on April 27, 2026. Representative Glenn Grothman (R-WI) introduced a companion bill, H.R. 8511, in the House the same day.
If enacted, the legislation would eliminate federal contracting programs that give preference to businesses based on the race, ethnicity, or sex of their owners. That includes two programs that many small businesses rely on to win federal work: the SBA’s 8(a) Business Development program, which helps firms owned by socially and economically disadvantaged individuals, and the Women-Owned Small Business (WOSB) program.
The bill would also repeal the Minority Business Development Act of 2021, end Disadvantaged Business Enterprise (DBE) preferences for Department of Transportation grants, and strip DEI-related federal reporting requirements for small businesses. Federal agencies would have 60 to 180 days after enactment to rescind related rules and guidance.
Importantly, the bill would retain support for small businesses generally and would not affect preferences for veteran-owned or rural businesses.
The legislation follows President Trump’s March 26, 2026 Executive Order 14398, which directed agencies to ban DEI-related practices in federal contracts. Sponsors say the bill is needed to put those changes into permanent statute so a future administration cannot reverse them.
Opposition has already formed. The National Association of Women Business Owners (NAWBO) and Women Impacting Public Policy (WIPP) called the bill a threat to decades of progress, urging lawmakers to reject it.
As of early May 2026, neither bill has co-sponsors, according to Government Executive. Both have been referred to committee. S. 4390 sits with the Senate Committee on Homeland Security and Governmental Affairs.
Small businesses currently enrolled in 8(a) or WOSB programs, or those planning to apply, should monitor this bill closely. Even if it stalls in committee, the underlying executive order is already changing how agencies handle contracting preferences. Firms that depend on set-aside contracts may want to review their federal sales strategy and consider how to compete without program preferences if the legal landscape shifts further.
