Government breaks small-business goals with stimulus funds

Small businesses have gotten 26 percent of the funds so far

A major share of the money under the economic stimulus law has been given to small businesses, topping a contracting goal the government tries to reach each year.

As of Oct. 2, the government, as whole, has spent 26 percent of the American Recovery and Reinvestment Act's  (ARRA) funds on contracts for small businesses, an estimated $4 billion, said Joseph Jordan, associate administrator for government contracting and business development at the Small Business Administration. Jordan made the statement today in testimony to the Senate Small Business and Entrepreneurship Committee.

Each year, the government tries to obligate 23 percent of its money to small businesses, but it often falls short of the goal. The government has not reached the goal since 2005, according to SBA’s figures.

In more specific categories of small businesses, Jordan said agencies are exceeding goals.

  • Small disadvantaged businesses have received 11 percent of the stimulus contract funding, 6 percent above the goal.
  • Service-disabled veteran-owned small businesses have received 4 percent of the funds, 1 percentage point over the goal.
  • Small businesses in Historically Underutilized Business Zones have received 7 percent, 4 percent more than the goal.

Jordan also said minority businesses have received 15 percent of contracting dollars, or $2.4 billion. However, his figure included some businesses that would not qualify as small.

Meanwhile, agencies are short of the mark for woman-owned small businesses, Jordan said. Those companies have received 4 percent of contracting dollars, while the goal is 5 percent. With the usual appropriated funds, agencies haven’t reached that goal since 2002, when such firms got 5.1 percent, according to SBA figures.

While agencies are still obligating stimulus money, the law has an overall $60 billion in prime contract opportunities available, and awarding approximately $13.8 billion would hit the 23 percent goal, Jordan said.

In the Defense Department, small businesses have been awarded more than half of the department’s already obligated ARRA dollars. Linda Oliver, acting director of DOD's Small Business Office, said as of Sept. 25, DOD had obligated $2.2 billion, or 31 percent, of the $7.4 billion in ARRA funds it received. Of those funds, $1.3 billion, or 58 percent, has gone to small businesses.

In September, SBA reported to the committee how specific agencies are doing in small business contracting with ARRA money. Of the agencies on SBA’s annual small business contracting scorecard, the Social Security Administration had awarded 1.8 percent of its $10.9 million in recovery act contracting funds, as of Sept. 11. The General Services Administration had awarded 5.2 percent of its $1.5 billion to small businesses.

Meanwhile, the Justice Department had awarded 95.8 percent of its $1.4 million to small businesses, as of Sept. 11, according to SBA.

“These goals are floors, not ceilings,” committee chairwoman Sen. Mary Landrieu (D-La.) said during today's hearing.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

Reader comments

Wed, Oct 14, 2009 Randy

A good choice of true words my thought are the same. where are the polls taken for this survey? we cannot get an audience with procurement officers in the govt. sector either after years of trying. I hope we can get Mr. Obama,s ear with your comments.

Fri, Oct 9, 2009 Ron Roybal

I am a small business owner and would like to know where the money is going, and who is getting it. Where is the transparency? All I see is unemployment numbers going up, and small businesses going out of business. Small businesses need help now.

Wed, Oct 7, 2009 Joe krippelz Aurora, Il

I am an owner of a small manufacturing business that produces fabricated and machined components for earthmoving equipment and large industrial machinery. and typically employs aprox. 70 people. We have been in business for over 25 years and never in those 25 years has the federal government ever offerd to give my business any kind of relief . All they have done is taken away our ability to grow and prosper through the heavy tax burdens it imposes on us in the form of unempolyment taxes ,payroll taxse, income taxes, property taxes, stc.In 2009 our business is down 90%, we laid off most of our employees, we are scouring the country for new business,I have tried to contact gov. agencies to get on bidding lists in hopes of obtain gov. business. Are you kidding ! That is a joke!The only ones getting the work are the same ones that always get the work! Our company has the ability and capacity to make everything from missle parts to Tank/submarine parts , but you can't even be seen by the people in those gov.positions that do the sourcing! Mr. Obama if you truly want our country to succeed you need to "take a look at us!!" The thousands of small business owners who haven't taken a pay check so we can pay our employees, and keep our lights on! "Take a look at us" the thousands of small business owners who fund every war,every useless program created by our congressmen and senators,"Take a look at us" the small business owners who even though we are down right now have put every posession ,invested every last dollar into our businesses, and are still working hard every day, to make sure our families and security as a country are not compromised by some radical group of idiots that want to take away what we as American business owners have built for our families, and what we stand for as Citizens of this great country! Mr. Obama,call together the thousands of independent business owners who helped put you in the white house to see what can be done to help us stay in business today, so we can keep the American dream alive for our grand childern tomorrow, and forever!

Wed, Oct 7, 2009 Jerry De Lacosta California

Instead of saving Millions of dollars by awarding a contract to a small highly qualified company that has an exact & desired solution that is wanted by the government agency, someone higher up the food chain decides instead to "Bundle" it & award it to a Large company, a campaign contributor, who simply adds a "Front End" to their large database that has an appropriate title so it looks right. No one at the Govt Agency will ever use this useless junk so that money is simply given to the Large company and the Agency then uses funds from another source to purchase instead from the small company the solution they want & need. We, the taxpayers get stuck paying twice although the first payment is simply a payoff and we get nothing for it at all. This isn't a theory but the reality that we have been facing for a number of years. It is extremely frustrating to know that you have a well liked solution that can & will save the Government lots of money but you can't get past the Political decision makers. Talk is cheap! Everyone talks about Small Business being the backbone of this country but Re-Election money rules!

Wed, Oct 7, 2009 Ray California

Aren't you taking the numbers from the fox standing in the hen house? These are the same people that claim they are close to hitting their goal, but in reality they allow billions to continue to go to the large companies that finance their bosses campaigns. I would be curious to find out where your numbers were pulled from, or did you just trust the crooks at the SBA?

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