A Quiet Federal Rule Change Threatens to Close the Door Again on Black and Immigrant Small Businesses in Minnesota
In this op-ed, Makee Company founder R. Lynn Pingol warns that a proposed OMB rule change would strip away supplier diversity programs, technical assistance and the SBA 8(a) pathway that small Black, immigrant and women-owned businesses rely on to access federal contracts, threatening Minnesota's commercial corridors and the communities they anchor.
Across Minnesota, small businesses are fighting to survive. You see it on Lake Street, on University Avenue, on West Broadway, on Payne Avenue… corridors rebuilt by the grit of Black, immigrant and women-owned businesses after years of crisis. These businesses are more than storefronts. They are the cultural and economic anchors of our communities. They hire our neighbors, mentor our youth and keep dollars circulating where they’re needed most.
And now, a quiet federal rule change threatens to undo that progress.
The Office of Management and Budget is proposing a rule that would strip away the very tools small businesses rely on to access federal dollars: outreach, supplier-diversity programs, technical assistance and the SBA 8(a) pathway. These are not “extras.” They are the only reason many small businesses, especially Black-owned and immigrant-owned firms, ever get a seat at the table.
Without these tools, the federal marketplace becomes a closed loop dominated by the biggest players. And when the big fish enter the small pond, we already know who gets pushed out.
Let’s be honest about the numbers. In 2023, white-owned firms received 97% of all federal contracting dollars. Large corporations captured more than three-quarters of the entire marketplace. Meanwhile, Black-owned businesses received 0.5%; Hispanic-owned businesses received 0.6%; Native-owned businesses received 0.3%; Asian-owned businesses received 1.1%; and women-owned businesses received 5%.
These disparities did not appear because of DEI programs. They existed long before DEI was ever discussed. DEI programs were created because the market was already closed to most of us.
So what happens if OMB removes the few access points we do have?
Minnesota’s corridors will feel it first.
Small businesses operate on thin margins. A missed contract can mean a hiring freeze. A delayed payment can mean a closure. A lost subcontract can mean another “For Lease” sign on a block that was just starting to recover. And once vacancies spread, the whole corridor suffers. Foot traffic drops, property values fall, and the neighborhood loses one more place that made it feel like home.
The damage doesn’t stop there. Cities lose tax revenue. Apprenticeships tied to federal projects disappear. Skilled workers leave the trades. Supply chains become more fragile. And the ladders into the middle class, the ones our communities fought to build, get pulled up.
This is not a technical policy change. It is a structural shift that will hit Black, immigrant and women-owned businesses first and hardest.
Minnesota cannot afford that. Our communities cannot afford that.
If the federal government is serious about equity, about economic mobility, about rebuilding cities from the ground up, then it must strengthen, not dismantle, the mechanisms that allow small businesses to compete.
OMB should withdraw this rule.
Minnesota’s leaders should oppose it.
And our communities must speak up before the door closes again.
Because when small businesses lose access to opportunity, our neighborhoods lose their future.
R. Lynn Pingol is the founder of Makee Company. She can be reached at rlynnp@makeecompany.com.
