Female entrepreneurs and people of color who own businesses are significantly less likely to get government contracts, according to a new 409-page study commissioned by the District.

Evaluating more than 1,000 businesses and $8 billion of contracts from 88 District agencies, the study found that there are “substantial disparities” between the businesses owned by people of color and women who are eligible for contracting activities and those that actually get them. It also shows that while many of these minority and women-owned companies struggle to win contracts, a small group of them snagged “exceptionally large” amounts of procurement dollars from the District.

“In order to be successful in winning public contracts in D.C., one of two situations needs to occur,” one anonymous business owner says in the report. “If you don’t either know the people involved and have a good relationship, or you don’t have that particular niche with the ‘minority’ that you need to have… the odds of getting that job are slim to none.”

D.C. Council allocated funding for the study in the city’s 2021 budget as a way to evaluate whether there were gender or racial disparities in the city’s business contracts.

“We have before us a once-in-a-lifetime opportunity to rethink how we build more equitable and inclusive communities,” said Mayor Muriel Bowser about the project in 2021. “With this study, we can learn more about what’s working and what isn’t, and in doing so, create better opportunities for women and people of color who do business in D.C.”

The study, conducted by BBC Research and Consulting, Pantera Management Group, and Tiber Hudson (BBC-Pantera-Tiber), assessed contracting data from fiscal years 2016 to 2020.

Bowser said in a statement published with the study that the District will use the data to create better opportunities for the city’s diverse array of entrepreneurs.

“While the District is fortunate to have many firms, and in fact does have higher than average contracting with POC- and women-owned firms, substantial disparities in contracting persist. In short, we can and will do even better,” Bowser said.

Bowser noted that in fiscal year 2016, District agencies spent $600 million with small business enterprises and increased that amount to more than $1 billion — a historic high — in fiscal year 2021.

The study outlines several recommendations for mitigating disparities, including the use of “race- and gender- conscious contract goals” (such as allocating a specific percentage of contract dollars to women and minority-owned businesses), ensuring prompt payment for contracts, and creating a certification category for microbusinesses.

“The next phase of our work will harness that data and keep moving the District forward toward a more equitable and resilient future,” added Bowser.