When it comes to what companies get a majority of government contracts on the national and local scale, less than 10% goes to small, disadvantaged businesses. That includes people of color-, women- or LGBTQ+-owned small businesses.

It’s why, at least at the federal level, President Joe Biden has made it a goal of his administration to award more contracts to diverse businesses of all sizes. That effort got a boost from the House of Representatives this week, as Rep. Joaquin Castro led 26 other members in the introduction of the Transparency in Government Contracts Act.

The bill, which is modeled on the Biden Administration’s current practice of disaggregating data on government contracts awarded to disadvantaged individuals by race, gender and ethnicity, would require the practice to continue under future administrations.

That data would also be accessible to the general public.

While introducing the bill, Castro highlighted the impact of small businesses in his district, which comprises the western part of San Antonio and contains a majority Latino population.

He’s also led local calls for the city to expand the government contracting opportunities to more diverse small businesses. It came after his office released a study that found under 20% of government contracts went to diverse contractors. The district itself is almost 70% Latino. 

“Small businesses are crucial drivers of job creation and community wealth,” Castro said after introducing the Transparency in Government Contracts Act. “The Biden administration’s practice of releasing disaggregated data on federal contracting awards has provided important data on the federal government’s progress in expanding equitable access to contracting opportunities, and this data transparency should continue under future administrations.” 

The Biden administration officially began its deeper disagreggation of data in 2021.

Per 2020 Census data, approximately 20% of employer businesses and 32% of non-employer businesses in the U.S. are minority owned. 

In the 2022 Fiscal Year, more than $700 billion was spent on government contract work, but less than 10% went to minority-owned businesses. 

Other notable Latino reps to join Castro in introducing the act were Raúl Grijalva, Nanette Barragán and Greg Casar. The bill was also endorsed by the U.S. Black Chambers, the National Asian/Pacific Islander Chamber of Commerce, and the U.S. Hispanic Chamber of Commerce.

Through increased oversight in how SBA contracts are awarded, we bring more transparency to government contracts and better position the more than 5 million Hispanic-owned businesses to be awarded more business—one of the proven ways to help companies grow and scale,” said Ramiro Cavazos, president and CEO of the U.S. Hispanic Chamber of Commerce.