II 118th CONGRESS 2d Session S. 5366 IN THE SENATE OF THE UNITED STATES November 21, 2024 Mr. Lee introduced the following bill; which was read twice and referred to the Committee on Homeland Security and Governmental Affairs A BILL To end preferences for disadvantaged individuals and businesses in Government contracts, and for other purposes.

1. Short title This Act may be cited as the Ending Racism in Government Contracting Act . 2. Ending preferences for disadvantaged individuals and businesses in Government contracts (a) Small Business Act The Small Business Act ( 15 U.S.C. 631 et seq. ) is amended— (1) in section 2 ( 15 U.S.C. 631 )— (A) by repealing subsection (f); and (B) in subsection (h)(1)(H), by striking while not adversely affecting the rights of socially and economically disadvantaged individuals ; (2) in section 7 ( 15 U.S.C. 636 )— (A) in subsection (a)— (i) in paragraph (15)(E)— (I) in clause (i), by striking including the number of loans and all that follows through the end of the clause and inserting the following: including the number of loans made to cooperatives; ; and (II) in clause (ii), by striking including the number of financings and all that follows through the end of the clause and inserting the following: including the number of financings made to cooperatives; and ; and (ii) in paragraph (36)(P)(iv), by striking small business concerns owned and controlled by socially and economically disadvantaged individuals (as defined in section 8(d)(3)(C)), ; and (B) in subsection (j)— (i) in paragraph (11)(I)(iii), by striking and a distribution of concerns across all industry and all that follows through has been limited in the second sentence; and (ii) in paragraph (16)(B)(iii), by striking owned and controlled by other than socially and economically disadvantaged individuals ; (3) in section 8 ( 15 U.S.C. 637 )— (A) in subsection (a)— (i) in paragraph (1)— (I) by inserting and after the semicolon at the end; (II) by striking subparagraphs (B) and (C); and (III) by redesignating subparagraph (D) as subparagraph (B); (ii) by repealing paragraphs (4) through (8); (iii) in paragraph (9)(B)— (I) by striking clause (i); and (II) by redesignating clauses (ii), (iii), and (iv) as clauses (i), (ii), and (iii), respectively; (iv) in paragraph (10), in the second sentence, by striking and from small disadvantaged business concerns in industry categories that have not substantially participated in the award of contracts let under the authority of this subsection ; and (v) in paragraph (12)— (I) in subparagraph (A), by striking and Disadvantaged ; (II) in subparagraph (C), in the first sentence, by striking , including those owned and controlled by socially and economically disadvantaged individuals, ; and (III) in subparagraph (D)(i), by striking and Disadvantaged ; (B) in subsection (d)— (i) in paragraph (1), by striking small business concerns owned and controlled by socially and economically disadvantaged individuals, each place that term appears; (ii) in paragraph (3)— (I) in subparagraph (A), by striking small business concerns owned and controlled by socially and economically disadvantaged individuals, each place that term appears; (II) by amending subparagraph (C) to read as follows: (C) As used in this contract, the term small business concern shall mean a small business as defined pursuant to section 3 of the Small Business Act and relevant regulations promulgated pursuant thereto. ; and (III) in subparagraph (F), by striking a small business concern owned and controlled by socially and economically disadvantaged individuals, ; (iii) in paragraph (4)— (I) in subparagraph (D), by striking small business concerns owned and controlled by socially and economically disadvantaged individuals, ; and (II) in subparagraph (E), by striking small business concerns owned and controlled by the socially and economically disadvantaged individuals as defined in paragraph (3) of this subsection and for ; (iv) in paragraph (6), by striking small business concerns owned and controlled by socially and economically disadvantaged individuals, each place that term appears; (v) in paragraph (11)(B), by striking small business concerns owned and controlled by socially and economically disadvantaged individuals, ; and (vi) in paragraph (13)(E)(i), by striking and Disadvantaged ; and (C) in subsection (m), by striking paragraphs (7) and (8); (4) in section 9(j)(2)(F) ( 15 U.S.C. 638(j)(2)(F) ), by striking socially and economically disadvantaged small business concerns, as defined in section 8(a)(4), and the participation of ; (5) in section 15 ( 15 U.S.C. 644 )— (A) in subsection (e)(1)(B), by striking and Disadvantaged ; (B) in subsection (g)— (i) in paragraph (1)(A)— (I) in the matter preceding clause (i), by striking small business concerns owned and controlled by socially and economically disadvantaged individuals, ; (II) by striking clause (iv); and (III) by redesignating clause (v) as clause (iv); and (ii) in paragraph (2)— (I) in subparagraph (A), by striking by small business concerns owned and controlled by socially and economically disadvantaged individuals, ; (II) in subparagraph (B), by striking small business concerns owned and controlled by socially and economically disadvantaged individuals, ; (III) in subparagraph (D), by striking small business concerns owned and controlled by socially and economically disadvantaged individuals, ; and (IV) in subparagraph (F)(ii), by striking and Disadvantaged ; (C) in subsection (h)(2)(E)— (i) by striking clause (iv); and (ii) by redesignating clauses (v) through (viii) as clauses (iv) through (vii), respectively; (D) in subsection (k)— (i) in the matter preceding paragraph (1), by striking and Disadvantaged ; (ii) in paragraph (1), by striking and Disadvantaged ; and (iii) in paragraph (2), by striking and Disadvantaged ; (E) in subsection (l)(2)(G), by striking and Disadvantaged ; (F) in subsection (s)(2)(A), by striking and Disadvantaged ; and (G) in subsection (y)— (i) in paragraph (2), by striking small business concerns owned and controlled by socially and economically disadvantaged individuals, each place that term appears; (ii) in paragraph (3)(B), by striking small business concerns owned and controlled by socially and economically disadvantaged individuals, ; and (iii) in paragraph (4), by striking subparagraph (D); (6) in section 16 ( 15 U.S.C. 645 )— (A) in subsection (d)(1), in the matter preceding subparagraph (A), by striking a small business concern owned and controlled by socially and economically disadvantaged individuals , ; (B) in subsection (e), by striking a small business concern owned and controlled by socially and economically disadvantaged individuals , ; and (C) in subsection (g)(2), by striking and Disadvantaged ; (7) in section 21(a)(5)(D) ( 15 U.S.C. 648(a)(5)(D) ), by striking small business, woman-owned business, or socially and economically disadvantaged business and inserting small business or woman-owned business ; (8) in section 22(l) ( 15 U.S.C. 649(l) )— (A) in paragraph (1)— (i) in subparagraph (C), by inserting and at the end; (ii) by striking subparagraph (D); and (iii) by redesignating subparagraph (E) as subparagraph (D); and (B) in paragraph (3)(B)(ii)— (i) by striking subclause (I); and (ii) by redesignating subclauses (II) and (III) as subclauses (I) and (II), respectively; and (9) in section 45(c)(1)(B) ( 15 U.S.C. 657r(c)(1)(B) )— (A) in clause (iii), by inserting or after the semicolon at the end; (B) by striking clause (iv); and (C) by redesignating clause (v) as clause (iv). (b) Amendments to other Acts (1) American Rescue Plan Act of 2021 The American Rescue Plan Act of 2021 ( Public Law 117–2 ) is amended— (A) in section 5003(c)(3)(A) ( 15 U.S.C. 9009c(c)(3)(A) ), in the first sentence, by striking , small business concerns owned and controlled by veterans and all that follows through the period at the end and inserting the following: or small business concerns owned and controlled by veterans (as defined in section 3(q) of that Act ( 15 U.S.C. 632(q) )). ; and (B) in section 5004(a) ( 15 U.S.C. 9013(a) ), by amending paragraph (5) to read as follows: (5) Eligible business The term eligible business means any small business concern, with priority for small business concerns owned and controlled by women (as defined in section 3(n) of the Small Business Act ( 15 U.S.C. 632(n) )) and small business concerns owned and controlled by veterans (as defined in section 3(q) of that Act ( 15 U.S.C. 632(q) )). . (2) Consolidated Appropriations Act, 2005 Section 155 of subtitle E of title I of division K of the Consolidated Appropriations Act, 2005 ( 15 U.S.C. 657g ) is repealed. (3) Federal Acquisition Streamlining Act of 1994 Section 7104 of the Federal Acquisition Streamlining Act of 1994 ( 15 U.S.C. 644a ) is amended— (A) in subsection (b)(3), by striking and Disadvantaged ; and (B) in subsection (c)(3), by striking and Disadvantaged . (4) Minority Business Development Act of 2021 The Minority Business Development Act of 2021 ( 15 U.S.C. 9521 et seq. ) is repealed. (5) Small Business Economic Policy Act of 1980 Section 303(e) of the Small Business Economic Policy Act of 1980 ( 15 U.S.C. 631b(e) ) is amended— (A) by striking paragraph (1); and (B) by redesignating paragraph (2), the first paragraph (3) (relating to qualified HUBZone small business concerns), and the second paragraph (3) (relating to small business concerns owned and controlled by veterans) as paragraphs (1), (2), and (3), respectively. (6) Small Business Investment Act of 1958 Section 411(c)(3)(B) of the Small Business Investment Act of 1958 ( 15 U.S.C. 694b(c)(3)(B) ) is amended by striking a small business concern owned and controlled by socially and economically disadvantaged individuals as defined by section 8(d) of the Small Business Act, or to . (c) Technical and conforming amendments (1) American Recovery and Reinvestment Act of 2009 Section 6001(h) of the American Recovery and Reinvestment Act of 2009 ( 47 U.S.C. 1305(h) ) is amended— (A) in paragraph (1), by inserting and after the semicolon; (B) in paragraph (2)(D), by striking ; and and inserting a period; and (C) by striking paragraph (3). (2) CARES Act Title I of the CARES Act ( 15 U.S.C. 9001 et seq. ) is amended— (A) in section 1107(a) ( 15 U.S.C. 9006(a) ), by repealing paragraph (5); and (B) by repealing section 1108 ( 15 U.S.C. 9007 ). (3) Energy Policy Act of 1992 Section 3021 of the Energy Policy Act of 1992 ( 42 U.S.C. 13556 ) is amended— (A) in subsection (a)— (i) by striking paragraph (1); and (ii) by redesignating paragraphs (2), (3), and (4) as paragraphs (1), (2), and (3), respectively; and (B) in subsection (b)— (i) by striking paragraph (2); and (ii) by redesignating paragraph (3) as paragraph (2). (4) Energy Policy Act of 2005 Section 1003(a)(1) of the Energy Policy Act of 2005 ( 42 U.S.C. 16393(a)(1) ) is amended by striking , including socially and economically disadvantaged small business concerns (as defined in section 8(a)(4) of the Small Business Act ( 15 U.S.C. 637(a)(4) )), . (5) Export-Import Bank Act of 1945 The Export-Import Bank Act of 1945 ( 12 U.S.C. 635 et seq. ) is amended— (A) in section 2(b)(1)(E)(iii)(II) ( 12 U.S.C. 635(b)(1)(E)(iii)(II) ), by striking to socially and economically disadvantaged small business concerns (as defined in section 8(a)(4) of the Small Business Act), small business concerns (as defined in section 3(a) of the Small Business Act) owned by women, and and inserting the following: to small business concerns (as defined in section 3(a) of the Small Business Act ( 15 U.S.C. 632(a) )) owned by women and ; (B) in section 3(i)(1) ( 12 U.S.C. 635a(i)(1) ), by striking socially and economically disadvantaged small business concerns (as defined in section 8(a)(4) of the Small Business Act) and ; and (C) in section 8 ( 12 U.S.C. 635g )— (i) in subsection (e), by striking socially and economically disadvantaged small business concerns (as defined in section 8(a)(4) of the Small Business Act), small business concerns (as defined in section 3(a) of the Small Business Act) owned by women, and and inserting small business concerns small business concerns (as defined in section 3(a) of the Small Business Act ( 15 U.S.C. 632(a) )) owned by women and ; and (ii) in subsection (f)(4), by striking socially and economically disadvantaged small business concerns (defined in section 8(a)(4) of the Small Business Act) and . (6) Federal Acquisition Streamlining Act of 1994 Section 7104(c) of the Federal Acquisition Streamlining Act of 1994 ( 15 U.S.C. 644a(c) ) is amended— (A) by striking paragraph (2); and (B) by redesignating paragraph (3) as paragraph (2). (7) Small Business Act Section 7(j) of the Small Business Act ( 15 U.S.C. 636(j) ) is amended— (A) in paragraph (10)(D)(i), by striking and shall be designed to result in the Program Participant eliminating the conditions or circumstances upon which the Administration determined eligibility pursuant to section 8(a)(6) ; and (B) in paragraph (11)— (i) by striking subparagraph (B); (ii) by redesignating subparagraphs (C) through (I) as subparagraphs (B) through (H), respectively; (iii) in subparagraph (C), as so redesignated, by striking (as defined pursuant to section 8(a)(4)) ; and (iv) in subparagraph (E), as so redesignated— (I) by striking clause (i); and (II) by redesignating clauses (ii) through (viii) as clauses (i) through (vii), respectively. (8) Small Business Jobs Act of 2010 Title III of the Small Business Jobs Act of 2010 ( 12 U.S.C. 5701 et seq. ) is amended— (A) in section 3002 ( 12 U.S.C. 5701 )— (i) by striking paragraph (18); and (ii) by redesignating paragraph (19) as paragraph (18); (B) in section 3003 ( 12 U.S.C. 5702 ), by repealing subsections (d) and (e); and (C) in section 3009(e) ( 12 U.S.C. 5708(e) )— (i) in paragraph (1)— (I) in the matter preceding subparagraph (A), by striking business enterprises owned and controlled by socially and economically disadvantaged individuals, to very small businesses and business enterprises owned and controlled by socially and economically disadvantaged individuals and inserting very small businesses ; and (II) in subparagraph (B), by adding and after the semicolon at the end; (ii) by striking paragraph (2); (iii) by redesignating paragraph (3) as paragraph (2); and (iv) in paragraph (2), as so redesignated— (I) by striking (with priority given to business enterprises owned and controlled by socially and economically disadvantaged individuals), ; and (II) by striking to provide technical assistance to business enterprises owned and controlled by socially and economically disadvantaged individuals and inserting to provide technical assistance to business enterprises . (9) Title 51, United States Code Section 30304 of title 51, United States Code, is repealed. 3. Ending racial and ethnic participation goals for Department of Transportation financial assistance programs (a) Written assurances for airport improvement project grants Section 47107(e) of title 49, United States Code, is amended— (1) in paragraph (1)— (A) by striking 10 percent and inserting 5 percent ; and (B) by striking small business concerns and all that follows through the period at the end and inserting disadvantaged business concerns (as defined in section 47113(a) of this title). ; (2) in paragraph (4)(B), in the second sentence, by striking small business concern and all that follows through the period at the end and inserting disadvantaged business concern (as defined in section 47113(a) of this title). ; and (3) in paragraph (6), by striking small business concern and all that follows through Small Business Act) and inserting disadvantaged business concern (as defined in section 47113(a) of this title) . (b) Disadvantaged business concern Section 47113 of title 49, United States Code, is amended— (1) in subsection (a)— (A) by striking paragraph (2); and (B) by inserting the following: (2) disadvantaged business concern and disadvantaged business enterprise mean a concern owned and controlled by women or a qualified HUBZone small business concern; and ; (2) by striking subsection (b); (3) in subsection (d), by striking small business concerns referred to in subsection (b) of this section and inserting disadvantaged business concerns ; and (4) by striking subsection (e). (c) Environmental Protection Agency The matter under the heading Administrative Provisions under the heading Environmental Protection Agency under the heading Independent Agencies in title III of the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1993, is amended by striking the first paragraph ( 42 U.S.C. 4370d ). 4. Ending racial and ethnic contracting goals in other government programs (a) Elimination of reporting on small business concerns owned and controlled by socially and economically disadvantaged individuals Section 1713 of title 41, United States Code, is amended— (1) in subsection (a)— (A) by striking paragraph (2); and (B) by redesignating paragraph (3) as paragraph (2); and (2) in the first sentence of subsection (b), by striking , the number of small businesses owned and controlled by women, and the number and all that follows through the period at the end and inserting and the number of small businesses owned and controlled by women. . (b) Disadvantaged business enterprises (1) In general Section 3021 of the Energy Policy Act of 1992 ( 42 U.S.C. 13556 ) is repealed. (2) Clerical amendment The table of contents in section 1(b) of the Energy Policy Act of 1992 ( Public Law 102–486 ; 106 Stat. 2782) is amended by striking the item relating to section 3021. 5. Ending all racial and ethnic discrimination in government contracting and awards (a) Civilian contracts (1) In general Chapter 47 of title 41, United States Code, is amended by adding at the end the following new section: 4715. Prohibition on racial and ethnic preferences in government contracts and awards The head of an executive agency may not— (1) take into consideration the race or ethnicity of individuals owning, controlling, or managing businesses or other entities when granting contracts or awards; or (2) place requirements on contractors or grantees that require or encourage them to take into consideration the race or ethnicity of individuals to whom they award contracts, subcontracts, or awards. . (2) Clerical amendment The table of sections at the beginning of chapter 47 of title 10, United States Code, is amended by inserting after the item relating to section 4714 the following new item: 4715. Prohibition on racial and ethnic preferences in government contracts and awards. . (b) Defense contracts (1) In general Chapter 363 of title 10, United States Code, is amended by adding at the end the following new section: 4663. Prohibition on racial and ethnic preferences in defense contracts and awards The head of an agency may not— (1) take into consideration the race or ethnicity of individuals owning, controlling, or managing businesses or other entities when granting contracts or awards; or (2) place requirements on contractors or grantees that require or encourage them to take into consideration the race or ethnicity of individuals to whom they award contracts, subcontracts, or awards. . (2) Clerical amendment The table of sections at the beginning of chapter 363 of title 10, United States Code, is amended by inserting after the item relating to section 4662 the following new item: 4663. Prohibition on racial and ethnic preferences in defense contracts and awards. . (c) Rulemaking Not later than 60 days after the date of the enactment of this Act, the head of each executive agency that has rules or regulations requiring or encouraging consideration of the racial or ethnic status of individuals to whom they grant contracts or awards shall submit a proposed rulemaking removing all such references. The agency shall complete the rulemaking within 180 days after the date of the enactment of this Act. (d) Guidance Not later than 60 days after the date of the enactment of this Act, the head of each executive agency that has guidance documents, directives, or notices requiring or encouraging consideration of the racial or ethnic status of individuals to whom they grant contracts or awards shall submit new guidance, directives, or notices removing all such references. (e) Executive agency defined In this section, the term executive agency has the meaning given the term in section 133 of title 41, United States Code.