Virginia Democrats just passed a bill that forces state agencies to spend up to 42% of contracting dollars based on race and gender—directly defying the Supreme Court’s ban on racial preferences while hiking taxpayer costs by as much as 25%.
Story Snapshot
- House Bill 61 mandates 3% annual increases in state spending on women- and minority-owned businesses until reaching 42%, with a 5% price preference allowing higher bids to win contracts
- Assistant Attorney General Harmeet Dhillon calls the bill “illegal” and predicts it will fail in court, citing the 2023 Supreme Court ruling against race-based admissions
- Tech entrepreneur Joe Lonsdale warns the mandatory preferences will add 5-25% to state project costs, draining taxpayer dollars on administrative overhead
- Governor Abigail Spanberger can veto the partisan bill before it auto-enacts in April 2026, but Democrats hold a trifecta making override possible
Race-Based Preferences Disguised as Small Business Support
Virginia’s House Bill 61 establishes the Small SWaM Business Procurement Enhancement Program, targeting small women-owned, minority-owned, and service-disabled veteran-owned businesses. The legislation requires state agencies to increase discretionary spending on these businesses by 3% annually until hitting a mandatory 42% threshold. For contracts between $10,000 and $200,000, the bill grants a 5% price preference, meaning a $200,000 SWaM bid would beat a $190,500 competitor. Democrats passed the bill strictly along party lines in early March 2026, sending it to Governor Spanberger’s desk on March 14. If she doesn’t veto, it becomes law in April.
Constitutional Collision Course After Supreme Court Ruling
The bill directly challenges the Supreme Court’s 2023 Students for Fair Admissions v. Harvard decision, which banned race-conscious admissions policies. Assistant Attorney General Harmeet Dhillon declared similar legislation “illegal” in January 2026, predicting it won’t survive judicial review. The law mandates disparity studies exclusively for women- and minority-owned businesses while curiously excluding service-disabled veterans from these assessments, despite including them in preferences. This selective approach undermines equal protection principles conservatives have long defended. The Department of Small Business and Supplier Diversity gains sweeping enforcement power, including authority to debar non-compliant contractors for up to one year.
Taxpayers Face Steep Cost Increases and Bureaucratic Bloat
Joe Lonsdale, co-founder of Palantir and 8VC, estimates the mandatory preferences will inflate project costs by 5-25%. The 5% price advantage means taxpayers automatically pay more when SWaM businesses submit higher bids. Beyond direct cost hikes, the bill imposes extensive administrative burdens: compliance reporting, liaison appointments, subcontracting plans, and ongoing disparity studies. Contractors working on state projects must navigate complex subcontracting requirements or risk debarment. These mandates divert resources from actual infrastructure improvements and public services. Virginia’s post-pandemic fiscal challenges make such wasteful spending particularly irresponsible, forcing hardworking families to subsidize a system that prioritizes identity over merit and efficiency.
Democrats Push Woke Contracting Against National Trend
Governor Spanberger’s Democratic administration advanced H.B. 61 alongside broader labor reforms including wage history bans and prevailing wage expansions. The timing is deliberate: as President Trump’s administration rolls back federal affirmative action mandates in 2026, Virginia Democrats are doubling down on race-conscious policies. This defies not only Supreme Court precedent but also common sense procurement principles that should reward the best value for citizens. The bill’s language includes Orwellian contradictions, claiming anti-discrimination protections while explicitly discriminating based on demographic categories. With Virginia’s prior SWaM goals already in place, this “enhancement” program reveals the left’s insatiable appetite for government-enforced equality of outcome rather than opportunity.
Legal Challenges and Political Reckoning Ahead
Legal experts anticipate swift court challenges if Spanberger allows the bill to become law. Federal courts have increasingly scrutinized race-based contracting programs following the 2023 Supreme Court decision, with Department of Transportation disadvantaged business enterprise programs facing multiple lawsuits nationwide. Virginia Republicans, though outnumbered in the Democratic trifecta, have signaled opposition to the wasteful expansion. The Department of Small Business and Supplier Diversity will implement the program if enacted, conducting mandatory studies and enforcing compliance through potentially arbitrary enforcement actions. This concentration of power in unelected bureaucrats threatens fair competition and constitutional rights. Conservatives watching this debate understand what’s at stake: either Virginia upholds merit-based contracting and equal protection, or it embraces discriminatory mandates that betray American principles while bleeding taxpayers dry.
Sources:
This Virginia Bill Expands Affirmative Action in State Contracting – Reason.com
Previewing Virginia’s 2026 Employment Legislation – Seyfarth Shaw
