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.


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