The move effectively shutters the agency, which had already faced dramatic cuts
The Trump administration on Friday sent reduction-in-force notices to all remaining employees at the Minority Business Development Agency (MBDA), according to an official familiar with the matter, paving the way for the de facto elimination of the agency.
The official said around two dozen employees received the notices, which are part of a wave of layoffs across the federal government due to the current government shutdown. Most of the agency’s staff was cut earlier this year after President Trump signed an executive order gutting the agency.
The move is the latest example of the Trump administration’s crackdown on affirmative action in the federal government. The agency offered special grants and contracts to minority-owned businesses until 2024, when a federal judge, Mark Pittman, ruled it could not use racial preferences to allocate capital. Last year, the agency received $70 million in funding and dispensed more than $1.5 billion in grants and contracts.
Minority-contracting programs are notorious for fraud. Contractors have been known to lie about their racial identity in order to access the programs, and set-asides have been linked to higher costs on infrastructure projects.
In order to qualify for the agency’s contracts, businesses needed to be at least 51-percent minority owned. To qualify as a minority, individuals needed to show they were at least 25-percent black, Hispanic, Asian, or Native American.
“While the Agency’s work may help alleviate opportunity gaps faced by [minority-owned businesses], two wrongs do not make a right,” Pittman wrote in his 2024 decision. “And the MBDA’s racial presumption is a wrong.”
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