The Effects of DBE Goals on Bid Success Rates

Abstract

Federally mandated aspirational disadvantaged business enterprise (DBE) goals for public procurement are designed to remedy current or ongoing discrimination. Legal concerns suggest that DBE goals might discriminate against non-DBEs by raising the cost of bids and producing lower bid success rates for non- DBEs than what would have occurred had there not been requirements for DBE goals. The authors combine data on DBE certification and contract and procurement bids to test the hypothesis that non- DBEs are discriminated against in the presence of DBE goals. Across multiple specifications and estimation methods, we find no compelling evidence that DBE goals discriminate against non-DBEs.