The U.S. Department of Treasury’s Office of Small and Disadvantaged Business Utilization (OSDBU) will close its doors on December 13, 2025, following Reduction in Force (RIF) notices issued on Friday, October 3. The closure is part of broader organization changes affecting small business support offices across multiple federal agencies.
Changes Across Federal Agencies
The Treasury OSDBU closure follows similar restructuring efforts at other agencies over the past six months:
- Department of Homeland Security: The DHS OSDBU underwent staff reductions approximately two months ago, with the office now operating with one remaining employee.
- U.S. Air Force: The Air Force small business office has been reduced to a single staff member, according to internal agency documentation.
- Department of Health and Human Services: The HHS OSDBU was reduced to only the Executive Director in April.
- Small Business Administration: The SBA has seen changes to its disadvantaged business programs.
- Minority Business Development Agency: The MBDA has also experienced staff reductions.
These offices – called Office of Small Business Programs (OSBPs) in Department of Defense agencies – have traditionally provided support to minority-owned, women-owned, veteran-owned, and other disadvantaged businesses seeking federal contracts.
Treasury OSDBU Background
The Treasury OSDBU, led by Executive Director Donna Ragucci until her retirement in June 2025 and Deputy Director Melissa Oliva, developed the 50 States Initiative. This program brought federal contracting resources directly to small businesses and entrepreneurs nationwide, representing a departure from traditional federal contracting outreach.
In December 2024, Homeland Security Today‘s Holiday Hero Awards recognized Ragucci and Oliva as “Federal Small Business Champions” for their work meeting small businesses “where they are” through the initiative, which provided knowledge, resources, and connections to entrepreneurs who might otherwise lack access to government contracting opportunities.
Understanding RIF Procedures
The U.S. Office of Personnel Management (OPM) issued guidance in March 2025 outlining RIF procedures:
Possible outcomes: Employees may be reassigned to equivalent positions in other offices, demoted to lower pay grades, or separated from federal service.
Notice period: Agencies must provide 60 days’ notice (or 30 days in some cases) before implementing a RIF. Receiving a notice does not guarantee the action will be executed.
Competitive levels: Agencies must establish categories based on position descriptions, including grade, classification series, and work schedule rather than individual qualifications.
Retention factors: Four objective criteria determine RIF decisions: tenure, veterans’ preference, total creditable federal service, and performance ratings.
Legal Developments
On October 15, U.S. District Judge Susan Illston issued an injunction blocking RIF actions during the ongoing government shutdown. The judge ruled that officials must follow legal requirements for conducting RIFs. The injunction protects workers represented by the American Federation of Government Employees, who asserted in their lawsuit “that firing federal employees during a shutdown is an unlawful abuse of power designed to punish workers and pressure Congress.”
Justice Department attorneys declined to address the merits of the RIFs in court, focusing instead on procedural jurisdiction questions and arguing that complaints should be brought before the Merit Systems Protection Board rather than in a lawsuit.
According to court filings, over 4,000 employees across multiple agencies, including Treasury, have received RIF notices during the shutdown. Office of Management and Budget Director Russ Vought stated on October 15 that the administration expected to lay off more than 10,000 employees during the shutdown.
Implications for Industry
As the December 13 closure date approaches for the Treasury OSDBU, questions arise about support resources for small businesses navigating federal contracting:
For small businesses: Companies that have worked with OSDBU offices may need to identify alternative points of contact within their target agencies. Procurement offices at individual agencies maintain responsibility for small business participation goals under existing statutory requirements.
For contractors: Industry organizations and procurement technical assistance centers may provide additional support resources. Existing contracts and set-aside programs continue under current law.
Current status: The court injunction provides temporary relief during the shutdown and applies only to union-represented workers. Whether properly conducted RIFs can proceed after the shutdown ends is not yet determined.
Next Steps
Federal employees who received RIF notices should review OPM guidance and may wish to consult legal counsel regarding their specific situations. The recent court ruling may provide grounds for additional administrative or legal challenges as the situation develops.
Small businesses should proactively contact agency contracting officers to understand how procurement support services will be structured going forward.
For more information on RIF procedures, employees can consult the full OPM Resources.