Journal of Public Economics· 2026Q1
The impact of preference programs in public procurement: Evidence from veteran set-asides
- 1citations
- Q1SCImago
- 2026year
Short summary
A 2016 policy change significantly increased contract awards for service-disabled veteran-owned small businesses (SDVOSBs) by the U.S. Department of Veterans Affairs (VA), benefiting both existing and new vendors without negatively impacting competition or contract execution.
AI-generated from the title and abstract; the full text is not read.
Key points
- A 2016 policy change expanded veteran set-aside programs, increasing contract awards for service-disabled veteran-owned small businesses (SDVOSBs) at the VA.
- The program benefited both pre-existing vendors and new entrants, including those who had previously failed to win contracts.
- No evidence of negative spillovers to other federal agencies was found.
- Competition for awards and contract execution performance did not decline.
- The findings suggest VA set-asides successfully improved outcomes for SDVOSBs without imposing significant costs on the government.
AI-generated from the title and abstract; the full text is not read.
Abstract
Veteran-owned businesses are given preferential treatment in the allocation of procurement contracts from the U.S. Department of Veterans Affairs – currently the largest civilian federal agency in terms of procurement spending. We exploit a 2016 Supreme Court ruling that significantly increased the scope of these set-asides, to study the impacts of preference programs on both the targeted businesses and procurement outcomes. The policy change increased the share of contracts awarded to the target population, service-disabled veteran-owned small businesses, and benefited not only preexisting vendors but also new entrants, including those who had previously failed to win contracts. We find no evidence of spillovers to awards by other federal agencies, no decline in competition for awards, and no deterioration of contract execution performance by vendors. These findings suggest that VA set-asides have successfully improved outcomes for the target population without imposing significant costs on the government.
The authors' abstract, as published at the source. Journal of Public Economics, 2026 · DOI ↗
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