Virginia Bill on Small Business Discretionary Funds Faces Legal Challenges
A recent bill in Virginia has passed with party line support, requiring state officials to take race and gender into account when allocating discretionary funds for procurement and contracts. Experts suggest this move could encounter substantial legal obstacles.
This legislation, known as the Small SWaM Business Acquisition Enhancement Program Act, mandates that executive branch agencies boost the utilization of small SWaM (Small, Women-Owned, and Minority-Owned) businesses by 3% annually until reaching a goal of 42% or, if that proves unfeasible, set attainable targets to increase utilization.
Proposed by Rep. Zion Ward, Democrat from Hampton, the bill stipulates that between $10,000 and $200,000 will be allocated specifically for SWaM businesses.
Kyle Brosnan, who handles legal affairs at the Oversight Project, remarked that this seems to be a logical step, but he expressed concerns that it may be viewed as discriminatory against white men. He stated, “The Virginia Democratic Party has revealed itself as radical ideologues since taking full control of state government.”
Brosnan emphasized that setting racial and gender quotas for government spending reflects a radical stance. Similarly, Zach Smith, a former federal prosecutor, highlighted that any government initiative that differentiates treatment based on these factors could be unconstitutional, echoing sentiments from the Supreme Court’s ruling in Harvard v. United Nations University about race’s prohibition in admissions.
Smith noted that the recent Supreme Court ruling has led federal courts to apply similar logic to state initiatives that promote minority-owned businesses. He raised the possibility of litigation should the bill be signed, suggesting that challenges may invoke the 14th Amendment.
Brosnan criticized additional elements of the bill, which would require Virginia taxpayers to fund $1 million for necessary updates and staffing. He argued this would effectively institutionalize discrimination, potentially reserving contracts worth up to $200,000 for women and minority-owned firms only if their bids were within 5% more than the lowest non-certified bids, implicitly favoring “white male-owned” businesses.
In his remarks, Brosnan questioned whether Virginians anticipated such systemic bias when voting for a supposedly moderate governor.
Furthermore, the bill necessitates a “disparity study” every five years, meant to ascertain the percentage of contracts awarded to white men and how to address that ratio, which has been labeled as “racial bid-rigging.”
Fox News Digital has reached out for comments from Governor Abigail Spanberger regarding whether she will approve the bill, as well as from Ward, who chairs the Capitol Square Labor and Commerce Committee.
