WASHINGTON, (Reuters) – The White House announced plans Thursday to require federal agencies to allocate at least 11% more contract dollars to small business owners who are economically disadvantaged next year. This is an increase from the average 9.8% for five years.

According to the White House, this modest increase would be well above the required 5% and is part of an effort to leverage the large buying power federal government has to help boost equity.

On a pre-announcement briefing, a top administration official stated that “President Biden has committed to leveraging all tools available to him… and helping to level the playing field… for a way to reduce the race wealth gap.”

According to him, the Federal Government is the largest purchaser of goods and services worldwide with $600 billion per year.

He said, “Federal Government can be a powerful catalyst of equity and wealth-building in underserved areas,” adding that 15% was the ultimate goal by 2025.

The federal law defines small, disadvantaged companies as a group that Black-owned or Latino-owned businesses and businesses owned by other minorities “are presumed” to be eligible.

This move is in response to a White House report that showed that there has been a 60% drop in small-business entrants into federal procurement.