The Office of Government Contracting and Business Development successfully steered over $5 billion in contracting opportunities for small businesses away from firms that were ineligible for set-asides.
A team of contracting experts within the Small Business Administration are battling back against contract bundling and category management initiatives that are causing a significant decline in the number of small businesses participating in the federal marketplace—and they’re starting to have success, an official told the House Small Business Committee on Thursday.
The Office of Government Contracting and Business Development has rolled out a series of new reforms to ensure contracting opportunities were reaching small businesses following reports which indicated small and minority organizations were disproportionately falling out of the federal government's shrinking vendor base compared to larger firms.
The reforms—which include performance-based incentives for contracting officers to help recruit small businesses as new entrants into the federal marketplace—come after a White House memorandum issued last year directing the government to increase the share of government contracts going to small, disadvantaged businesses to 15% by 2025.
To prevent ineligible organizations from obtaining set asides for small businesses, the office conducted a review in fiscal year 2021 and identified 66 companies that were not qualified to receive the contracting opportunities they were already awarded. Those reviews led to the redirecting of more than $5 billion in contracts to legitimate small businesses, according to Bibi Hidalgo, associate administrator for the Office of Government Contracting & Business Development.
"We want to make sure that we are being welcoming to firms that want to contract for the federal government because of the opportunity it provides in being able to contract with the largest purchaser in the globe," Hidalgo said, adding that revised key performance indicators for contracting officials and tracking new federal marketplace entrants will help ensure "that we don’t only increase the dollars, but we also increase the number of businesses that could benefit" from SBA programs and set asides for small businesses.
Hidalgo said the office is also collaborating with a fraud risk management board SBA Administrator Isabella Guzman recently launched "to make sure that the businesses that Congress intended to benefit from these programs are in fact benefiting from the programs."
The Biden administration hopes to direct at least $100 billion in contracting opportunities to marginalized businesses by 2025. The General Services Administration also announced a four-fold increase in contracting goals for small disadvantaged businesses for fiscal year 2022.
The rate of small businesses in the federal marketplace sank 17% from 2016 to 2019, as FCW previously reported, and nearly 40% of that decline has been attributed to category management and other procurement methods that have gained popularity in recent years which experts say shut out small businesses from most opportunities.