Affirmative Action Retrenchment in Public Procurement and Contracting

This paper provides estimates of the impacts of the replacement of a race-conscious affirmative action program in public procurement and contracting with a program that includes both a race-conscious and a race-neutral component. It examines the effect of the replacement of a disadvantaged business enterprise program (DBE) with a new program that includes a race-neutral set-aside program called the Emerging Small Business Enterprise Program (ESBE) in New Jersey in 2003-2004. We show that although women- and minority-owned firms conceptually benefit from ESBE set-asides, they do not benefit as much as non-DBEs, resulting in a reduced share of total contract dollars awarded to DBEs.