The U.S. federal government annually awards billions of dollars as contracts to procure different products and services from external businesses. Although the federal government’s immense purchasing power provides a unique opportunity to invest in the nation’s women-owned businesses (WOBs) and minority-owned businesses (MOBs) and advance the entrepreneurial dreams of many more Americans, gender and racial disparities in federal procurement are pervasive. In this study, we undertake a granular examination of these disparities by analyzing the data on 1,551,610 contracts awarded by 58 different federal government agencies. Specifically, we examine the representation of WOBs and MOBs in contracts with varying levels of STEM intensity and across 19 different contract categories, which capture the wide array of products and services purchased by the federal government. We show that contracts with higher levels of STEM intensity are associated with a lower likelihood of being awarded to WOBs and MOBs. Interestingly, the negative association between a contract’s STEM intensity and its likelihood to be awarded to MOBs is particularly salient for Black-, and Hispanic-owned businesses. Among the 19 categories of contracts, Black-owned businesses are more likely to receive contracts that are characterized by lower median pay levels. Collectively, these results provide data-driven evidence demonstrating the need to make a distinction between the different categories of MOBs and consider the type of products and services being procured while carrying out an examination of racial disparities in federal procurement.

Public procurement is often used to achieve policy goals beyond the purchase of the required goods and services. These goals include the economic advancement of minorities, the promotion of fair labour practices and climate action. In the last two decades, many countries have used public procurement to advance gender equality. This is referred to as gender-responsive procurement and is often implemented through the award of public contracts to women-owned businesses. While many countries have legal provisions designed to increase the award of public contracts to women, gender-responsive procurement is extremely limited and women-owned businesses are not fully integrated into public sector supply chains. This is unfortunate, given that gender-responsive procurement can improve women's economic empowerment, with implications for sustainable development. This article adopts a gender equality and women's economic empowerment lens to examine the legal, policy and cultural barriers to gender-responsive procurement and recommends measures to improve the award of public contracts to women-owned businesses.