Set-Asides Are Government-Sanctioned Discrimination

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Trump Is Right to Limit Them While California Doubles Down on Absurdity

Set-asides in government contracting — reserving slices of taxpayer-funded work for favored identity groups — are both immoral and counterproductive. They prioritize race, sex, orientation, or other characteristics over merit, competence, and fair competition. President Trump is moving aggressively at the federal level to curb these preferences, pushing for performance-based, fixed-price contracting and rooting out ideological discrimination in favor of actual results. California, predictably, is heading in the opposite direction with its bizarre push for LGBTQ-owned business set-asides in utility contracting. This program perfectly illustrates why these schemes are ridiculous, invasive, and damaging to taxpayers and the economy.

Trump’s Push Against Federal Set-Asides

The Trump administration is systematically limiting preferential set-asides and related DEI mandates in federal procurement. Executive actions emphasize merit, fixed-price contracts as the default, and performance over identity checkboxes. This aligns with broader efforts to eliminate illegal discrimination in contracting, rescinding prior orders that embedded racial, gender, or other preferences. The goal is simple: award contracts to the best qualified bidders who deliver value to taxpayers, not to meet arbitrary demographic quotas. This approach reduces costs, improves quality, and rejects the divisive identity politics that have bloated government spending for decades.

California’s Ridiculous LGBTQ Set-Aside Program

California’s Public Utilities Commission (CPUC) runs a Supplier Diversity Program under General Order 156. In 2022, it expanded to include explicit goals for LGBT-owned businesses: starting at 0.5% in 2022, rising to 1% in 2023, and hitting 1.5% in 2024 and beyond. Large utilities (those with over $25 million in annual revenue) face pressure to meet these targets through procurement from certified LGBTBE (LGBT Business Enterprise) firms. If fully met, this could direct roughly $633 million annually from utilities’ combined spending.

This isn’t a hard quota on paper, but utilities must submit detailed plans, annual reports, demographic data, and explanations for missing goals. In practice, it functions as strong pressure to prioritize certified firms, creating de facto preferences.

How to Qualify: The Invasive “Prove You’re Gay Enough” Process

To get certified, a business must be at least 51% owned, operated, managed, and controlled by one or more LGBT individuals (lesbian, gay, bisexual, transgender, etc.). The process, handled through the Supplier Clearinghouse or the National LGBTQ+ Chamber of Commerce (NGLCC), requires proving sexual orientation or gender identity — something no legitimate contracting program should demand. Accepted evidence includes:

  • Letters from LGBT organizations attesting to the owner’s status.
  • Newspaper articles identifying the owner as LGBT.
  • Three personal reference letters on company letterhead from contacts confirming the owner’s orientation.
  • Marriage certificates, health insurance beneficiary documents, or even HR complaints/police records related to discrimination based on orientation.
  • Site visits and other documentation to verify ownership and control.

Certification lasts a few years and comes with fees (hundreds of dollars). False representation carries penalties: fines up to $25,000 and up to one year in county jail. This turns government contracting into a bizarre identity verification regime that invades privacy and incentivizes fraud or performative declarations.

Why This Is Immoral, Ridiculous, and Bad Policy

Set-asides based on sexual orientation have zero connection to economic disadvantage or historical contracting barriers in the same way some race-based programs claimed (though those are also constitutionally shaky). Sexual orientation is not a proxy for business capability. Forcing utilities — and ultimately ratepayers — to divert hundreds of millions based on owners’ private lives discriminates against everyone else, including straight-owned small businesses, veterans, or merit-based competitors. It raises costs, reduces competition, and invites abuse.

Trump’s federal approach rejects this identity madness in favor of neutral, results-oriented contracting. California’s experiment shows the left’s endless expansion of grievance categories: from race and gender to orientation and beyond. It doesn’t create wealth — it redistributes opportunities based on politics. Merit-based competition delivers better services at lower costs. Set-asides do the opposite, entrenching inefficiency and division. America First contracting means the best bidder wins, full stop. California’s “gay enough” paperwork is exactly the kind of nonsense that drives businesses and residents out of the state.