FEDCON is corroborating recent warnings from the U.S. Department of the Treasury regarding the systemic misuse of Diversity, Equity, and Inclusion (DEI)
TAMPA, FL, UNITED STATES, January 6, 2026 /EINPresswire.com/ — FEDCON (FederalGovernment.info), a leading strategic partner in federal procurement and compliance, today is corroborating recent warnings from the U.S. Department of the Treasury regarding the systemic misuse of Diversity, Equity, and Inclusion (DEI) incentives. FEDCON’s independent outreach and data analysis suggest that current DEI-driven procurement mandates are increasingly serving as a “net-negative” to the federal contracting ecosystem by distorting market competition and facilitating fraudulent “pass-through” arrangements.
FEDCON’s research follows the Treasury Department’s November 2025 announcement of a department-wide probe into potential fraud within preference-based contracting. While the Treasury’s focus has been on fiscal accountability, FEDCON’s research provides a broader look at the operational impact these incentives have on the industry at large.
Key Findings from the FEDCON Independent Research:
The “Pass-Through” Crisis: FEDCON’s outreach to over 1,500 active contractors revealed a 22% increase in reported “front” companies—entities that qualify for DEI-based set-asides but subcontract the vast majority of work to large, non-eligible firms.
Merit Displacement: 64% of surveyed procurement officers and contractors expressed concern that DEI incentives have prioritized demographic certifications over technical past performance, leading to project delays and cost overruns.
Administrative Inflation: The research indicates that the compliance burden for tracking and verifying DEI metrics has added an estimated 12% in overhead costs for legitimate small businesses, often pricing them out of the very “restricted” pools meant to help them.
“Our research confirms what the Treasury has recently flagged: the current implementation of DEI incentives is failing the very people it was designed to serve,” said a spokesperson for FEDCON. “Instead of fostering a diverse and robust industrial base, these incentives have created a secondary market for compliance gymnastics. It has become a net-negative that rewards those who can navigate the paperwork rather than those who deliver the best value to the American taxpayer.”
FEDCON’s research highlights how the misuse of these programs creates a “bottleneck” in the procurement cycle, where legitimate small businesses are forced to compete against fraudulent “pass-throughs,” leading to a decrease in overall contract performance and quality.
Feedback from Public:
FEDCON reached out to a plethora of federal contractors and were given an on-the-record response from Brad Judd of Ace Global Enterprises Corporation. Brad Judd stated to a representative of FederalGovernment.info that he was aware of DEI being both a hindrance on the best contractor receiving the contract and that he was well aware of numerous gray areas being taken advantage of by some federal contractors. Brad expressed distaste for the lack of meritocracy involved and increased bureaucracy of attempts to award contracts on anything other than merit. Brad Judd also stated that such initiatives have made him weary of expanding due to uncertainties in contracting space caused by non-merit considerations.
Looking Forward:
FEDCON is calling for a “Merit-First” overhaul of the Federal Acquisition Regulation (FAR) to ensure that while small business participation remains a priority, it is never at the expense of fiscal integrity or operational excellence.
About FEDCON (FederalGovernment.info): FEDCON is a premier consulting firm dedicated to helping businesses navigate the complexities of government contracting. From SAM registrations to strategic proposal development, FEDCON provides the data-driven expertise necessary for firms to compete, win, and remain compliant in a shifting regulatory landscape.
Marina Nicola
Federal Endowment Directing Consultants, LLC
+1 855-233-3266
email us here
Visit us on social media:
LinkedIn
Instagram
YouTube
Legal Disclaimer:
EIN Presswire provides this news content “as is” without warranty of any kind. We do not accept any responsibility or liability
for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this
article. If you have any complaints or copyright issues related to this article, kindly contact the author above.
