Agencies fail, again, to meet small-business contracting goals

Federal agencies awarded $6.4 billion fewer contracting dollars to small businesses in fiscal 2011 than in the previous year, leading one lawmaker to call the numbers “abysmal.”

Small businesses received $91.5 billion in prime contracts last year, coming to 21.65 percent of federal contracting dollars. Small businesses received $97.9 billion in fiscal 2010, equating to 22.7 percent of the dollars. The annual governmentwide goal is 23 percent.

The Small Business Administration gave the government a B overall for its efforts last year. A grade of A is for exceeding the set goal. A B is for achieving 90 percent to 99 percent.

For the segments of small businesses, agencies failed to meet the goals for three of the four segments.

Small companies owned by women received $16.8 billion last year, or 3.98 percent. In fiscal 2010, they received 4.04 percent. The goal is 5 percent.

Companies in economically depressed regions, known as Historically Underutilized Business Zones (HUBZones), received $9.9 billion, or 2.35 percent, of federal dollars. In fiscal 2010, they received 2.77 percent. The goal is 3 percent.

On a somewhat positive note, service-disabled veteran-owned small businesses received $11.2 billion, or 2.65 percent, of federal dollars. It was an increase in the amount of money awarded. In fiscal 2010, they received $10.8 billion, or 2.50 percent. Nevertheless, agencies failed to reach the 3-percent goal.

Agencies did exceed one goal: Small, disadvantaged businesses received $32.4 billion, or 7.67 percent of dollars. That was a decline from fiscal 2010, when they received 7.95 percent of dollars, but still beat the goal of 5 percent.

The scorecard reflects the need for federal agencies to find ways to improve their small-business contracting, John Shoraka, associate administrator for government contracting and business development at SBA, wrote July 3 on SBA’s blog.

He added that SBA has increased its efforts and collaboration with agencies in the last year to provide more opportunities for small business to compete for and win contracts.

“But we know more must be done to ensure that more contracts get into the hands of small businesses,” he wrote.

To help, SBA officials are putting in place 19 provisions of the Small Business Jobs Act, such as giving contracting officers more flexibility to award contracts and limiting bundled contracts. Officials are also improving its procurement data and working with agency leaders to make small businesses a priority.

Sen. Olympia Snowe (R-Maine), ranking member of the Small Business and Entrepreneurship Committee, said the numbers were disappointing, especially in this economic climate.

“At a time when small businesses are under intense pressure to survive, let alone grow, today’s numbers demonstrate an unfortunate and abysmal regression from previous years,” she said.

Led by Rep. Sam Graves (R-Mo.), chairman of the Small Business Committee, the House has a number of small-business contracting provisions in its fiscal 2013 National Defense Authorization Act. Among other things, it would increase the contracting goal to 25 percent from 23 percent. The Obama administration disagrees with the House’s 2-percent increase, saying it is overly ambitious.

Graves said that position and the contracting scorecard reflects the administration’s emphasis on small businesses.

“This demonstrates that President Obama is simply paying lip service to small businesses rather than delivering results. That’s why I’m so disappointed that this administration is opposing our legislation,” he said.

However, Joe Jordan, administrator of the Office of Federal Procurement Policy who formerly held Shoraka’s position, has said he wants to make small businesses a focal point of his efforts. In his memos, he often emphasizes that agencies should find ways to help small business in contracting.

About the Author

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

Cyber. Covered.

Government Cyber Insider tracks the technologies, policies, threats and emerging solutions that shape the cybersecurity landscape.


Reader comments

Mon, Jul 9, 2012

The whole small business "goals" thing is a bit bogus to begin with. You have changing rules on what applies as "small business", changing types/volumes of work going on that may be suitable for "small business", and changing goals. Our contracting office exceeded their "goal" one year and then was told that, for the next year, to have an even higher goal above what they attained. Definately not an incentive to meet or exceed goals. Considering it is all about politics and not saving tax dollars, (not to mention all the money wasted on the paperwork to run the program) it seems to be something we really do not need.

Fri, Jul 6, 2012 Richard Plocica DC metro area

The use of arbitrary numbers as goals is nonsense. If you are buying ballpoint pens and paperclips or gettng the grass mowed small business has a strong position. In consulting and basic services the small businesses can be contributors. But when building the plates for an aircraft carrier they are not capable of aving the resources required. Likewise, in IT and communications SBA has contributed to much of our current vulnerability by using small businesses to set up and manage LANs all over the place in an uncontrolled patchwork. The technology now demands a higher level of sophistication and capability to go to qualified centrally managed secure systems with worldwide resources. A lot of money is going to be spent on technology transitions and small players will have fewer niches to enjoy. Time to get real and not play number games. This is serious business now.

Fri, Jul 6, 2012

Year and year, a modest goal is set for Federal agancies to provide less than 1/4 of all monies paid to contractors who provide goods and services. And every year, the USG fails to meet that goal! How does that rate a B? Failure is failure and should never be rewarded with a grade that proclaims "good" job!

Fri, Jul 6, 2012 Iris McCammon

Matthew - I agree with the facts on the numbers and it looks like the government may have fallen short, but I will tell you as a consultant, I do work with small companies who are preparing to do business with the government and still learning the "how tos" as part of the qualification process. Being a small business opens the door, it's not a guarantee - but there are possibilities.

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