Black Businesses Could Lose Access To Federal Contracts Due To DEI Order, Report

A special edition of The Blackout Report suggests Black businesses could lose access to federal contracts over anti-DEI policies.

A new report says President Trump’s latest DEI order could significantly derail Black businesses’ ability to gain federal contracts.

The Blackout Report, published April 23 by Onyx Impact, suggests that Black businesses are at risk of being left out of federal contracting opportunities due to this anti-DEI legislation. The Blackout Report details the “concrete harms” to Black communities prompted by the Trump administration and its policies.

This year’s special edition report argues that this federal contracting shift has already begun, with the latest order further threatening this revenue-boosting pathway. Trump’s executive order, issued March 26, directly targets equity policies in federal contracting, limiting these opportunities for Black business owners.

While federal contracting is already a lucrative industry, with the report noting a $774 billion market, Black businesses hold only a tiny share of these profits. In fact, only 1.2% of federal dollars actually go toward these entities. The vast majority of federal contract funding goes to white-owned companies, accounting for 93.6% of all dollars received.

“Federal contracting is one of the clearest pathways to wealth generation in this country, and Black-owned businesses receive only 1.2% of the payments,” said Onyx Impact Founder and CEO Esosa Osa, according to Revolt. “When you target a group already confined to 1.2%, you are actively enforcing a broken system.”

Now, these numbers could shrink even more if Black businesses are phased out of this “wealth pipeline,” with $9.3 billion at risk of flowing out of Black wealth generation. Federal contracts have sustained and elevated many Black businesses, supporting jobs, supplying capital, and adding credibility to these companies.

However, under this new compliance framework, contracts could come to a halt as contractors seek to avoid risk. Its impact could leave these businesses, already handed just a margin of opportunity, with even less to sustain themselves for the future.

Furthermore, Black women, who own 48% of all Black businesses, could also take a significant hit. The report found that Black women CEOs with The BOW Collective reported revenue declines, with over half reporting losses exceeding $100,000.

Despite the pushback against partnering with Black businesses, minority-owned companies have greatly contributed to revenue generation and employment opportunities in the United States. However, accessibility barriers have stunted these companies from scaling operations, with this latest policy jeopardizing this growth even more.